Tax Refund

A tax refund is what the taxpayer receives when the amount of taxes owed is less than the taxes withheld from their income, or if they are less than the refundable tax credits the individual claims. Most taxpayers receive refunds, especially because of earned income credit. Essentially, a tax refund is repayment for monies taken from the taxpayer by the government.

Refunds are dispersed in two ways. Your refund can be electronically deposited in your bank account, or it can be mailed directly to you. Electronically is the more popular option, because it is quickest. If an individual efiles and requests direct deposit, it usually takes about three to six weeks, depending upon the taxpayer's filing status. There are also programs such as the Rapid Anticipation Loan, or RAL, which can be delivered in one or two days. However, this method is actually a loan based upon your credit and the promise of a refund, and can have extremely high fees. Plus, if some unforeseen difficulty should arise with your refund, you still have to pay back the RAL to the bank that financed it.

Tax Refund Status

You can keep tabs on your refund by going to the IRS website, or by calling the refund line setup by the IRS. It is advisable however to use the website, as the telephone lines are usually tied up. Provided that everything on your tax return forms are correct, you should receive your taxes at the time they were estimated, sometimes even a few days earlier.

Telephone Excise Tax Refund

One of the refunds available this year is the telephone excise tax, which basically pays back individuals who were taxed with this excise tax unlawfully. The telephone excise tax has actually been around since the Spanish-American War, being reinstated and dropped continuously. It has been used during every major US war to raise funds for the military. This has caused it to be known to some as the war tax. It has also been used during times of economic difficulty to boost up the deficit. There has been frequent controversy throughout the years concerning this tax. Numerous court cases were fought, and many appeals made. In 2005, the tax was essentially repealed, except for the local service tax. Now, taxpayers who have paid this tax can receive a refund or use it as credit against their federal income tax.