A tax refund is a reimbursement from the government to a taxpayer when their tax payments exceed their tax liability for the year. This occurs when individuals or businesses have withheld more money from their income than is necessary, or when they qualify for certain deductions and credits that lower their overall tax bill. The refund serves as a way to return the excess amount, and it can be viewed as an interest-free loan to the government during the tax year.
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