A tax refund is a return of money you’ve given to the government during the year; it happens when your total withholdings and estimated payments are less than what you owe (or if you’re eligible for and claim certain credits).

There are many benefits to collecting a tax refund. For example, not only do most people have an incentive to keep their withholdings as low as possible because they don’t want to spend more money than necessary each month, but some people also look at their tax refunds as free money from Uncle Sam. In addition, getting a tax refund can be a great way to build up an emergency fund since collecting one doesn’t have any adverse effects on your credit score, and you don’t need to wait until the following year for it.