economy
Will I get a tax refund if I owe money from a previous year?
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TL;DR
- Tax refunds are calculated based on the current tax year's income, deductions, withholding, and credits.
- The IRS can automatically intercept future tax refunds to pay off outstanding federal tax debt from prior years through the Treasury Offset Program.
- If a refund is less than the outstanding debt, the entire refund will be applied to the debt.
- If a refund exceeds the outstanding debt, the remainder will be sent to the taxpayer.
- Options to address tax debt include installment agreements, Currently Not Collectible status, and Offer in Compromise.
- Adjusting tax withholding can help provide more money throughout the year but carries the risk of creating new debt.
- Working with a tax relief company can provide guidance and assistance in resolving tax debt issues.