What Is a Tax Refund?

A tax refund is money the IRS sends back to you when you've paid more in taxes throughout the year than you actually owe. This usually happens because too much was withheld from your paychecks. A big refund sounds great, but it actually means you gave the government an interest-free loan all year. You can adjust your W-4 to have less withheld and keep more money in each paycheck. Most refunds arrive within 21 days of filing if you file electronically.