Frequently asked questions

A refund is just the difference between what was withheld or paid during the year and your actual tax. It can shrink if less was withheld (for example, after a new W-4 or a raise), if your income went up, if you lost a credit (like a child aging out of the child tax credit at 17), or if you had untaxed side income.

The IRS says most people who e-file and choose direct deposit get their refund within 21 days. Paper returns take longer. By law, refunds that include the earned income credit or the additional child tax credit can't be issued before mid-February. Check the status with the IRS "Where's My Refund?" tool on IRS.gov.

Not necessarily. It means you overpaid during the year and the IRS is giving your own money back, without interest. Some people like it as forced savings; others would rather have more in each paycheck.

File on time anyway, since the penalty for not filing is usually bigger than the penalty for not paying. Pay what you can, and look at an IRS payment plan. Interest and penalties keep adding up until the balance is paid.

Money from friends and family for personal things, like splitting dinner or rent, isn't income. Money from selling goods or services for profit is income and must be reported, whether or not you get a Form 1099-K. Payment apps generally send a 1099-K only above $20,000 and 200 transactions.

Yes, side income is taxable even if no form was sent. If your net self-employment earnings were $400 or more, you also owe self-employment tax.

Not exactly. For 2025 through 2028, eligible workers can deduct qualified tips (up to $25,000) and the extra part of qualified overtime (up to $12,500, or $25,000 if married filing jointly), with income limits. They're still subject to Social Security and Medicare tax, and your state may still tax them.

Yes. Unemployment benefits are taxable on your federal return. You'll get Form 1099-G, and you can choose to have tax withheld from the payments.

Partly, depending on your other income. Some people pay no tax on their benefits, and some pay tax on up to 85% of them.

Generally yes if your income is at least the standard deduction for your filing status, and in some other cases, like having $400 or more of self-employment earnings. Even if you don't have to, filing can get back withheld tax or refundable credits.

Often, yes. IRS Free File offers free software for people under an income limit, and Free File Fillable Forms are available to everyone. VITA and TCE sites offer free in-person help for people who qualify.

Take whichever is bigger. Most people take the standard deduction because their mortgage interest, state and local taxes, and charitable gifts don't add up to more than it.

A deduction lowers the income your tax is figured on. A credit lowers the tax itself, dollar for dollar. A $1,000 credit is usually worth much more than a $1,000 deduction.

Usually, if you live or earned income in a state with an income tax. Eight states have no individual income tax.

If you find an error after filing, you can usually fix it with Form 1040-X, the amended return. You generally have three years from when you filed to claim a refund. The IRS often corrects simple math errors on its own and sends a notice.

The IRS generally says to keep records for three years from when you filed. Some situations call for longer, such as six years if income was significantly underreported, and seven years for a claim involving a bad debt or worthless securities. Keep records about property until several years after you sell it.

This is tax-related identity theft. Follow the instructions on any IRS letter you received, and see IRS.gov/identitytheft. An Identity Protection PIN from the IRS can help prevent it from happening again.