The U.S. uses a tax system that is referred to as “progressive,” that is, the more you make, the more you pay. The amount you pay is based on “what you are able to pay.” There are tax scales available to you from your tax professional to help you determine that number. That’s why the government asks you for all those different numbers on your tax forms! Also, the tax system is referred to as a “voluntary” system. Not because you don’t have to pay taxes at all (you have to, it’s a felony if you don’t), but because you have a large amount of control over how much you pay. You can take credits and deductions to make the amount of taxes you pay less than what you would have paid just claiming your income and nothing more.
So of course, that brings up the question: Why do I sometimes owe the government money and then other times they owe me money? Basically, because you paid too many taxes. The way our system is set up, you pay taxes on your income throughout the year instead of one lump sum at the end of the year. The taxes they take out through the year are set at a certain amount depending on your status (dependent, independent, independent with dependents, etc). If you calculate how much you should have paid based on your income and your filing status and it’s less than what you did pay, you get a refund. In rare cases, the opposite occurs and you have to pay federal taxes. Usually, you are more likely to have to pay state taxes than federal ones (I owed the state of PA one dollar. Needless to say, they don’t make you pay for a dollar or less). It was estimated that 77% of tax filers got some sort of refund in 2004.