IRS Tax Helper

The Internal Revenue Service [IRS] is the name of the government agency that is in charge of the Federal Income Tax system. (Yawn…) If this is where your understanding of the Federal Income Tax system stops, you are not alone. The art of understanding how to collect a simple Federal Income Tax Refund becomes more complicated every year. Our IRS instruction books are completely outrageous, and simply – ‘they’ know it.

The IRS is made up of human beings who are trying to use those Federal Income Tax Refund instructions right along with us. Once this understanding is internalized, filing a Federal Tax return for the purpose of getting your refund becomes a whole lot easier.

What is a Federal Income Tax Refund?

Jobs that produce a paycheck are pre-taxed by the government. An amount of money is taken out of each paycheck and given to the government for the purpose of pre-paying your yearly Federal Tax dues. The amount of money being given to the government is based upon a calculated guess that varies according to individual situations. Normally, the guess is wrong and money must either be paid or refunded to settle the tax bill.

The Federal government allows a variety of items that can reduce the amount of taxes that is owed to the IRS. These items are called ‘deductions’. Those complicated Federal Income Tax Refund instructions are all about the deductions that taxpayers are allowed to ask the government to remove from the owing tax bill. While there is an EZ form that is easier to fill out for the refund, the longer 1040 form often results in a bigger refund.

One of the very first deductions that taxpayers should see if they qualify for is called an Earned Income Credit or EIC. This credit is worth up to 4,824 dollars depending upon individual circumstances and how many children are living in the home. Up to 25% of all taxpayers who are allowed to ask for this refund fail to do so. People without children may also ask for this money if they qualify under the rules.

The Federal Income Tax Refund is made by mail after the IRS receives the paperwork. Some people believe that it is wise to hold the money received on the refund for a period of 60 days before spending it to see if the IRS will be sending a second note asking for an explanation on part of your paperwork. In recent years, the IRS sends out refunds first in some cases and then decides to ask questions later that might result in some of the Federal Income Tax Refund money needing to be returned.