Tax Refunds: Everything You Need to Know
As you get ready to file your tax return, you’re likely hearing about tax refunds left and right.
But who gets tax refunds, and how can you find out if you will?
Here’s a closer look at the ins and outs you need to know:
— What is a tax return?
— Will I get a tax refund?
— Who gets a tax refund?
— How can I get a bigger tax refund?
— Where is my tax refund?
— What should I do with my tax refund?
— When will I get a tax refund if I file a tax extension?
What Is a Tax Return?
A tax return consists of the form(s) you file with the government to report your filing status, dependents, income, deductions, credits and tax payments. Its main purpose is to document the amount of tax you owe — or how much the IRS owes you — for a given year.
United States citizens are required to file tax returns once they hit the income thresholds for their filing statuses, which range from $15,750 to $31,500 for tax year 2025. In 2026, those thresholds increase to $16,100 to $32,200.
While Form 1040 is the standard document for federal personal income tax returns, you may need to attach other forms and schedules. For example, if you operate as a sole proprietor, you’ll need to file Schedule C.
Filing returns can get complicated, but tax software, tax advisors and the IRS website can help you decide which forms and schedules you need.
[See: 10 Best Tax Software Companies of 2026]
Will I Get a Tax Refund?
Most people do get tax refunds. In its 2025 Annual Report to Congress, the Taxpayer Advocate Service said 63% of taxpayers received refunds last year. The average refund was $3,167.
You’ll likely get a refund if your tax withholdings or estimated payments exceed your tax liability for a tax year.
Going forward, if you’re not sure how much to withhold or pay in estimated taxes, the IRS provides these tools to help you:
— If you receive wages and/or salaries: Use the Tax Withholding Estimator to figure out the amount you should have withheld from each paycheck.
— If you pay estimated taxes: Use the worksheet on Form 1040-ES, Estimated Tax for Individuals to figure out the right amount to pay.
Employers use tax withholding tables provided by the IRS to calculate the correct amount of tax to withhold from paychecks. However, the IRS did not issue new tax withholding tables after the passage of the One Big Beautiful Bill Act last year. For this reason, some people may see larger-than-normal refunds for tax year 2025.
[See: 6 Best Mobile Tax Apps of 2026]
Who Gets a Tax Refund?
The IRS issues refunds when taxpayers overpay into the system, Krystal Pino, an accountant, says.
“While payroll withholdings and estimated tax payments are aimed at hitting the nail on the head, there are other factors that sometimes are not considered, like capital losses or other tax deductions, exemptions or credits,” she says.
Additionally, some taxpayers purposely overpay throughout the year to get a bigger refund — they use the system like a savings account.
[See: 5 Best Crypto Tax Software Companies of 2026]
How Can I Get a Bigger Tax Refund?
“There are multiple ways you can maximize tax refunds,” Stuart Boxenbaum, certified financial planner and president of Statewide Financial Group, says.
Here are three ways you can aim for a bigger refund:
— Setting up consistent tax withholdings based on income or salary.
— Keeping detailed, accurate records of all tax-deductible expenses.
— Making a contribution directly into a retirement account but doing it at the end of the year when there is no adjustment for withholding during the year.
That said, a bigger refund isn’t always better.
“Since a tax refund is a return of the money that you’ve overpaid, maximizing that amount may not be the best strategy,” Pino says. “The old adage that a dollar today is worth more than a dollar tomorrow means that the more of the money you have throughout the year, the more you can use it to invest or save and earn money on your money.”
Where Is My Tax Refund?
The IRS says the turnaround time for receiving a refund depends on how you file.
— Paper filing: Filers should receive refunds within six or more weeks after the date the IRS receives the return.
— Electronic filing: Filers should receive refunds in fewer than three weeks from the day they e-filed — and even faster if the refund is directly deposited into a bank account.
Your refund can be delayed, however, if your return is incomplete or requires an in-depth IRS review. But you don’t have to wait and wonder — you can check the status of your refund online or through the IRS2Go app.
What Should I Do With My Tax Refund?
The best way to spend your tax refund depends on your financial situation and priorities.
“While the ideal move for many people appears to be a vacation or splurge of some sort with this newfound money that can feel like a bonus, the savvy move would be to factor it into one’s overall financial plan,” Bryan M. Kuderna, CFP and founder of Kuderna Financial Team, says.
Kuderna recommends a financial strategy that prioritizes protection, building an emergency fund and eliminating high-interest debt. After that, he recommends shifting to a focus on wealth accumulation.
With that in mind, he says, “If the tax refund recipient has all of their insurances in order and paid for, at least six months of expenses in cash for a rainy day, credit cards or any high-interest debts paid off, and investment plans already on track … then the reward of a vacation may be in order.”
When Will I Get a Tax Refund if I File an Extension?
The IRS typically processes returns as it received them and prioritizes those for which refunds are due. As long as the IRS doesn’t have to manually review your return and there isn’t a backup in returns processing, it should send your refund according to normal turnaround times.
If you do plan to file your return late, though, keep in mind that you have three years from your original tax due date to claim your refund.
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Tax Refunds: Everything You Need to Know originally appeared on usnews.com
Update 04/07/26: This story was published at an earlier date and has been updated with new information.