refund

play

verb re·fund \ ri-ˈfənd , ˈrē-ˌ \

Updated on: 26 Jul 2017

Definition of refund

transitive verb

1 :to give or put back

2 :to return (money) in restitution, repayment, or balancing of accounts

—

refundability

play \ri-ˌfən-də-ˈbi-lə-tē, (ˌ)rē-\ noun

—

refundable

play \-ˈfən-də-bəl\ adjective

Origin and Etymology of refund

Middle English refounden, from Anglo-French & Latin; Anglo-French refunder, from Latin refundere, literally, to pour back, from re- + fundere to pour — more at found

NEW! Time Traveler

First Known Use: 15th century

See Words from the same year

Other Economics Terms

actuary, compound interest, globalization, indemnity, portfolio, rentier, stagflation, usurer

refund

play

noun re·fund \ ˈrē-ˌfənd \

Definition of refund

1 :the act of refunding

2 :a sum refunded

See refund defined for English-language learners

Examples of refund in a Sentence

No refunds or exchanges are allowed.

First Known Use of refund

1711

Other Economics Terms

actuary, compound interest, globalization, indemnity, portfolio, rentier, stagflation, usurer

refund

play

verb re·fund \ (ˌ)rē-ˈfənd \

Definition of refund

transitive verb

:to fund again

Origin and Etymology of refund

re- + ²fund

NEW! Time Traveler

First Known Use: 1857

See Words from the same year

Other Economics Terms

actuary, compound interest, globalization, indemnity, portfolio, rentier, stagflation, usurer

Financial Definition of REFUND

refund

noun

What It Is

Refund can refer to the amount that the Internal Revenue Service will pay to a taxpayer based an overpayment of estimated tax or employer withholding taxes during the year.

A refund also refers to the procedure where an issuer refinances outstanding bonds by issuing new bonds.

How It Works

During the year, a taxpayer is obligated to make estimated tax payments to the Internal Revenue Service. This may be done directly by the taxpayer or through an arrangement with the taxpayer's employer to pay that tax on his or her behalf. At the end of the year, the taxpayer files his or her tax return to the Internal Revenue Service with exemptions, deductions, and tax credits. These may reduce the annual tax obligation and the IRS will refund the difference.

With respect to the later definition, a bond issuer may decide to reduce the interest cost or to remove a covenant imposed by the terms of a bond. By refunding the bonds, the issuer actually issues new bonds and uses the proceeds to repay the debt service or retire the outstanding bonds of the prior issue (i.e. original bond issue being refunded).

Why It Matters

Tax refunds are an important boost for a taxpayer. By overpaying the IRS, the taxpayer gets a sudden shot of cash; however, it is without interest. To that end, it is important to elect to designate all eligible exemptions on employer withholdings and to accurately estimate quarterly tax payments to the IRS.

Bond refunding is an important strategy for issuers to use when the terms and conditions of a bond issue become too onerous, especially when market conditions change. Important to note that refunded bonds are not considered part of the issuer's debt because the lien of the holders on the refunded bonds is on the deposited bond proceeds (i.e. from the refunding), and not on the issuers source of revenues to pay the original bonds.

Source: Investing Answers

REFUND Defined for English Language Learners

refund

play

noun

Definition of refund for English Language Learners

: an amount of money that is given back to someone who has returned a product, paid too much, etc.

REFUND Defined for Kids

refund

play

verb re·fund \ ri-ˈfənd \

Definition of refund for Students

refunded; refunding

:to return (money) as repayment

If you are not satisfied the purchase price will be refunded.

Word Root of refund

The Latin word fundere, meaning “to pour,” and its form fūsus give us the roots fund and fus. Words from the Latin fundere have something to do with pouring. To refund is to pour someone's money back to her or him. Confusion exists when too many things are poured together so that they become uncertain and unclear. A profusion is a great quantity that seems to have been poured forth from a plentiful supply.