Understanding Your Tax Refund: Are You Overpaying The IRS?

(Washington, DC) - A financial windfall is something that most of us dream about, but very seldom do we get to experience it. For folks like you and me, a financial windfall would be finding $10 bucks in a winter coat pocket when the weather turns cold in the fall. Or, maybe, winning $5 on a $1 scratch-off ticket from the lottery. Our financial windfalls are not the same kind that "rich people" have.

However, the opportunity for a financial windfall in the form of an extra $775 from the federal government could be closer at hand than most of us realize. Yes, it has to do with your income tax return. And yes, you will have to file that return on time if you want to even sniff the chance to get an extra $775.

Why is the Extra Tax Refund Amount Listed at $775?

By the way, don't get hung up on that figure, $775. It's an average based on current data released by the Internal Revenue Service. I will explain how we arrived at the number and why, for simplicity's sake, we are using it as the focal point of this narrative.

Michael Burrell

According to the IRS, the average tax refund from returns that have been filed for the recently ended 2025 is up about 10%. The $775 figure is an average amount more in dollars and cents, as opposed to percentages, that the average American taxpayer is getting back as part of their refund check this year.

What is "The Catch" That Comes with the Extra $775 Tax Refund?

The catch with the extra tax refund money is the same catch that comes with every tax refund check you get. It's not a bonus from Uncle Sam. It's not a gift from Clay Higgins, John Kennedy, and Steve Scalise; it's not even a personal payout from President Donald Trump or the ghost of Hillary's hard drive. It's your money you've just been letting the federal government use it, interest-free, for the past 12 months.

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And while these and other politicians will "take credit" for returning to you what was already yours, the reason your tax refund might look a little larger is basic math. When Congress passed the Big Beautiful Bill, as it's been called. The legislation allowed for many new deductions on your personal return.

jrwasserman

The legislation did not update employee withholding tables used by employers to calculate taxes for that same time period. So, your employer was withholding money at the old tax rates while you were being taxed at the newer, lower tax rates. It's basically an overpayment.

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So, unless you adjusted your payroll tax employee withholdings at the time of the Big Beautiful Bill's passage, you've been overpaying your taxes. And the politicians want you to thank them for letting you have more of your money. I will leave that up to you if you want to do that.

And just remember, when your friend or co-worker brags about how big their tax refund was this year, just know they overpaid Uncle Sam even more than you. You'd think with that extra money, at least some of these Interstate Bridges would have been repaired by now, wouldn't you?