Taxes 101: What's the Difference Between a Tax Return and Tax Refund?

Income taxes are like many other financial subjects -- complicated at first glance but easier to understand when broken down into fundamentals. Whether you're using tax software, hiring a professional or doing your 2022 taxes with pen and paper, learning exactly how the American tax system works can help set your mind at ease and better prepare you for getting your taxes finished.

Let's start with tax returns and tax refunds. The two terms sound similar and are sometimes conflated -- someone might mistakenly mention that their "tax return" has been deposited in their bank account. However, a tax return and a tax refund are different things, and it's an important distinction to know.

We'll explain below the differences of each term, and how to find out whether you're getting tax money back this year. For more tax tips, learn when you'll get your W-2 form and all the potential tax breaks for homeowners.

What's a tax return?

A tax return is a form you file each year with the IRS that gives your adjusted gross income, or AGI, expenses and other financial information. Most of these details come from your W-2 statement, which your workplace provides you weeks in advance so you can file your taxes, but you might also have a 1099 or other form for recording your income. 

Your tax return will include your gross income (which is different from your AGI), how much you've already paid toward taxes (through your company's withholding or estimated taxes that you prepaid if you're self-employed) and other important information you'll need to file your taxes.

However, the tax return will also include things like deductions for your kids, how much you paid in student loan interest, health care coverage, Roth IRA contributions, home office expenses, business expenses and charitable donations. 

You must file a tax return in order to get a refund. However, just because you've filed a return doesn't mean you'll get a tax refund. 

What's a tax refund?

A tax refund is what's issued to you by the US Treasury if, in the previous year, you paid more in state or federal taxes than you needed to. For example, maybe your workplace withheld more money than was actually needed from your paycheck or you're self-employed and wound up overpaying quarterly estimated taxes. 

The government will reimburse you the difference between what you paid (in your tax return) and what you owed as a lump sum payment. Also, any deductions you claim on your taxes can add to the amount you can expect to receive. Here's how to track your tax refund with the IRS.

How do I know if I'm getting a tax refund in 2023?

If you use tax filing software or a tax filing service, you'll see a final estimate of how much you should receive after you file your tax return (including if you self-prepare). Once the IRS receives your return, assuming it finds no errors and accepts your return, it'll send you an email or a text message letting you know your final refund amount. That means your money is on the way to your bank account or mailbox. You can track your refund from the time you file your taxes until you receive your payment. Note that it can take anywhere from one to three weeks to get your refund back.

For more information about your taxes, here are 10 tax changes that could affect the size of your refund. Also, here's how to get your tax return done for free.