A tax withholding form and a pen
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These Are the Taxes You Can Get Back From the IRS

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Feb. 23 2022, Published 8:08 a.m. ET

The tax filing season is generally dreaded, though it can bring some people something to look forward to: refunds. What taxes do you get back?

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The U.S. tax system is pay-as-you-go, meaning that you're required to pay income taxes as you receive your income during the year. For salaried people's income, part is withheld in taxes by their employer. Meanwhile, for income that isn't partially withheld (for example, earnings from self-employment, interest, dividends, rent, or alimony), estimated taxes need to be paid.

What portion of taxes do you get back?

When you receive your paycheck, you’ll see that some of the earnings are held back for various taxes, such as federal income tax, FICA (Federal Insurance Contributions Act) tax, and state and local taxes. Withheld or estimated taxes that are over and above your tax liability for the year are refunded.

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tax refund tax season
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In your tax refund estimate, only federal and state or local taxes are considered, as FICA tax is different from income tax. It's also possible to get a refund on a federal tax return while owing money on a state tax return, and vice versa.

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Generally, you won’t receive a FICA tax refund unless there's been an error, as the amount withheld is applied to your earned income and not subject to deductions or credits. FICA tax includes Social Security tax and Medicare tax.

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A lower tax liability can boost your refund

Other ways to lower your tax liability and get more of a tax refund include the following:

  • Tax deductions, which reduce your taxable income and thereby your tax liability. The value of a tax deduction depends on your tax bracket. These deductions include mortgage interest, state and local taxes, medical expenses, and American opportunity tax credits.
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  • Tax credits, which reduce your tax liability. They comprise nonrefundable credits, which can reduce your tax liability to a maximum of zero in a year, and refundable credits, which can reduce your tax liability to below zero (meaning you can be refunded more than you paid during a year).

How much tax do you get back?

The amount you can claim back depends on the taxes you've paid or withheld, as well as your taxes due, tax deductions, and tax credits. In 2021, 128 million Americans (about 70 percent of taxpayers) received an average refund of $2,775, according to the IRS. That average refund was about 3.1 percent higher than the year before.

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