How is refund calculated?
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.
What happens when you get a refund?
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.