How is refund calculated?

Every year, your refund is calculated as the amount withheld for federal income tax, minus your total federal income tax for the year. A large portion of the money being withheld from each of your paychecks does not actually go toward federal income tax.



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The merchant refunds the purchase amount back to your credit card issuer, and the card issuer then credits your account for the returned amount, removing it from your statement balance.

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