Anyone getting a lot less back in taxes?

[leahjade]

My only confusion is that we're getting back $800 more than we paid in taxes.

This is what is wrong with our tax system. Why should anyone get a refund for more than they paid? A co-worker of mine gets all kinds of tax credits being a single mom (who doesn't want to marry her kids' father for this very reason) and never pays any income tax and still gets a nice check from the IRS. She won't work fulltime either though offered several times due to the government freebies she would lose. Then there are middle class folks like ourselves where we each take on a part-time job to get ahead and end up paying much more in taxes even though we had extra taken out of our checks just in case. That's why we need a flat tax so everyone pays one percentage -it's fair and encourages the hard work our country was founded on.

 

[tzolkin]

This is what is wrong with our tax system. Why should anyone get a refund for more than they paid? A co-worker of mine gets all kinds of tax credits being a single mom (who doesn't want to marry her kids' father for this very reason) and never pays any income tax and still gets a nice check from the IRS. She won't work fulltime either though offered several times due to the government freebies she would lose. Then there are middle class folks like ourselves where we each take on a part-time job to get ahead and end up paying much more in taxes even though we had extra taken out of our checks just in case. That's why we need a flat tax so everyone pays one percentage -it's fair and encourages the hard work our country was founded on.

We've never received back more than what we paid before, that's why the making work pay credit was confusing me.

We're actually getting back a little under $700 more than we had withheld in federal tax-- our tax is about $100, but then there's the $800 making work pay credit. After all the deductions (we just take the standard) and exemptions, we only have to pay federal tax on about $20K.

DH did pay almost $5K in social security and medicare tax that we obviously do not get back.

We get back a little under half of what he paid in state.

 

[wdwfan16]

We've never received back more than what we paid before, that's why the making work pay credit was confusing me.

We're actually getting back a little under $700 more than we had withheld in federal tax-- our tax is about $100, but then there's the $800 making work pay credit. After all the deductions (we just take the standard) and exemptions, we only have to pay federal tax on about $20K.

DH did pay almost $5K in social security and medicare tax that we obviously do not get back.

We get back a little under half of what he paid in state.

According to the tax tables $20K for a married filing jointly taxpayer would result in $2169.

$5K in SS and medicare is $65K in income. How does the standard deduction get you a $45K write off? Married filing jointly standard deduction is $11,400. If you DH was 50+ and your maximum 401K contribution would be 15% of $65K or $9750. I am not sure how many dependents you have but they would have had to reduce the taxes by $24K more.

On the surface there seems to be a problem with your return. You may want to recheck it

 

[tzolkin]

According to the tax tables $20K for a married filing jointly taxpayer would result in $2169.

$5K in SS and medicare is $65K in income. How does the standard deduction get you a $45K write off? Married filing jointly standard deduction is $11,400. If you DH was 50+ and your maximum 401K contribution would be 15% of $65K or $9750. I am not sure how many dependents you have but they would have had to reduce the taxes by $24K more.

On the surface there seems to be a problem with your return. You may want to recheck it

Okay, this is ridiculous ....

57,914 AGI - 12,400 (total deduction from Schedule L) - 18,250 exemptions = 27,264 taxable income

Tax on that should be 3,256 - 3,000 (child tax credit) - 146 energy credit = $110 total tax


I guess I will refrain from posting any questions or concerns in the future, so I'm not accused by two people of cheating on my taxes and trying to steal money from the governtment.

 

[PrincessDadx2]

Right! I was totally confused about this as well and did a ton of research on it since when I did my taxes, it said I was eligible for the $800. But now I realize it was just an accounting correction...not a true "credit" I was afraid I was double-dipping and was going to have my taxes rejected! And with having to file a paper return for the first time ever because of the home buyers credit...they'll be enough of a holdup on my return. I don't want a mathmatical error causing more of a delay.

You are still confused It is definitely a true credit. To help the economy it was given to you before you file your taxes by taking less out of your paycheck. Now you are settling up, but if you do not include it on your return you will rob yourself of $800 that is due you. All things being equal you would have received $800 more in your check during the year and owe $800 when you file your tax. The $800 credit is applied on your return and the net amount owed is $0. Of course, all things are not equal

 

[PrincessDadx2]

My only confusion is that we're getting back $800 more than we paid in taxes.

This credit is a refundable credit, which means that even if you owe no tax you can still receive the money from the government. The government can end up paying you. That is the point of "stimulating" the economy.

Some credits are only allowed up to the amount of tax you owe and are not refundable.

 

[roadtripper]

I expected to get less back, because we did not contribute to our pre-tax retirement funds for a few months due to changes in the 403(b) laws. The real killer is that I took a class through work for free (which was great) but they are considering the tuition a scholarship, and I am being taxed on the cost of the class as income--to the tune of about a 500 difference in our refund. I don't think I would have paid 500 for the class, let alone the 1475 in income they "charged" me.

 

[zipadeedoodamom]

Another Making Work Pay question....

My husband is employed full-time and I assume that he received the extra payments in his check (although I am not positive)

I am a SAHM with no income...

We file Married Filing Joint. Are we only eligible for $400, since I don't work, or are we eligible for $800 since we are married filing joint.

We are middle income, so our income does not exceed the amount where we would not qualify at all.

Thanks!

 

[Tnkrbelle565]

You are still confused It is definitely a true credit. To help the economy it was given to you before you file your taxes by taking less out of your paycheck. Now you are settling up, but if you do not include it on your return you will rob yourself of $800 that is due you. All things being equal you would have received $800 more in your check during the year and owe $800 when you file your tax. The $800 credit is applied on your return and the net amount owed is $0. Of course, all things are not equal

You're right... I am! We got the extra money in our paychecks (not that we really noticed it ) and Schedule M says we are entitled to it now. So doesn't that seem like we are getting it twice???? So the only way I can make sense of it in my brain is that it's an accounting correction!

 

[maggieusa]

Another Making Work Pay question....

My husband is employed full-time and I assume that he received the extra payments in his check (although I am not positive)

I am a SAHM with no income...

We file Married Filing Joint. Are we only eligible for $400, since I don't work, or are we eligible for $800 since we are married filing joint.

We are middle income, so our income does not exceed the amount where we would not qualify at all.

Thanks!

I am a stay at home mom too and we got the full $800 credit

 

[PrincessDadx2]

You're right... I am! We got the extra money in our paychecks (not that we really noticed it ) and Schedule M says we are entitled to it now. So doesn't that seem like we are getting it twice???? So the only way I can make sense of it in my brain is that it's an accounting correction!

Actually it is both

Taxes and refunds are related, but not the same thing.

To simplify:

Before Making work pay tax return

Amount of tax = $3,800
Withholding = $5,000
Refund = $1,200

After Making work pay tax return

Amount of tax = $3,000 ($3800-$800 credit)
Withholding = $5,000
Refund = $2,000

Now it gets tricky The way you got the $2,000 was in two parts.

1. reducing your withholding by $800 (your tax refund early)
2. your regular refund (have to wait until you file)

So your final tax return will actually look like this

Amount of tax = $3,000 ($3800-$800 credit)
Withholding = $4,200
Refund = $1,200

so you really got $2,000 back and you really got an extra $800 because your tax went down and it is not double dipping. It just looks like the same refund as before because they reduced your withholding.

See, it is really very simple Now I am confused

 

[PrincessDadx2]

Another Making Work Pay question....

My husband is employed full-time and I assume that he received the extra payments in his check (although I am not positive)

I am a SAHM with no income...

We file Married Filing Joint. Are we only eligible for $400, since I don't work, or are we eligible for $800 since we are married filing joint.

We are middle income, so our income does not exceed the amount where we would not qualify at all.

Thanks!

The credit is per taxpayer, not wage earner, so you will receive $800 if you are otherwise eligible. My DW is a SAHM and we received the full $800.

 

[Tnkrbelle565]

Actually it is both

Taxes and refunds are related, but not the same thing.

To simplify:

Before Making work pay tax return

Amount of tax = $3,800
Withholding = $5,000
Refund = $1,200

After Making work pay tax return

Amount of tax = $3,000 ($3800-$800 credit)
Withholding = $5,000
Refund = $2,000

Now it gets tricky The way you got the $2,000 was in two parts.

1. reducing your withholding by $800 (your tax refund early)
2. your regular refund (have to wait until you file)

So your final tax return will actually look like this

Amount of tax = $3,000 ($3800-$800 credit)
Withholding = $4,200
Refund = $1,200

so you really got $2,000 back and you really got an extra $800 because your tax went down and it is not double dipping. It just looks like the same refund as before because they reduced your withholding.

See, it is really very simple Now I am confused

Thanks for trying to explain anyway! This is why I went to school to be a social worker. Very little math!!!

 

[5 Disney Fans]

We are also getting back a LOT less this year. In fact, TT said we don't get child credits because we are making too much (can't figure that out b/c I don't think I make ENOUGH!)

What are the advantages to changing our status to married filing separately? One of us makes double what the other spouse makes, but combined we are in way too high of a tax bracket.

 

[wdwfan16]

We are also getting back a LOT less this year. In fact, TT said we don't get child credits because we are making too much (can't figure that out b/c I don't think I make ENOUGH!)

What are the advantages to changing our status to married filing separately? One of us makes double what the other spouse makes, but combined we are in way too high of a tax bracket.

Since you are using TT just try it. In most cases filing jointly is the best way. Separate is best when one has way more deductions that are just their, medical. The think to remember is if one itemizes them both need to itemize.

We have only done separate once. It was after I had major surgery and tests and tests and test. We got back an extra $400 that year.

 

[deerhart]

We are also getting back a LOT less this year. In fact, TT said we don't get child credits because we are making too much (can't figure that out b/c I don't think I make ENOUGH!)

What are the advantages to changing our status to married filing separately? One of us makes double what the other spouse makes, but combined we are in way too high of a tax bracket.

It depends on what other deductions you have. For example, you cannot take student loan credits when filing separately, you cannot take dependent care credit, you cannot take tuition credits, other credits income levels are reduced including the child tax, retirement contributions, personal deduction. itemized deductions.

Most calculations will have those filing married filing separately paying more in taxes then those filing jointly. I make twice what my spouse does and I looked last year at filing separately. No matter how we cut it, the result of filing separately was paying the gov 3k versus getting a $1200 refund filing jointly.

 

[ICF]

We are getting back more. We are up to a $1200 refund on State, due to getting a 20% refund ($800) based on our 529 College Fund contribuions of $4000 last year.

I would suggest any Indiana residents take advantage of this nice benefit before someone wises up and eliminates it.

 

[leahjade]

$500 LESS - not a happy camper here! That's our vacation money! I even had more taken off our checks and can't see any big difference in deductions, income etc. It's very disappointing!

 

[Ericandjenng]

For the 1st time ever, we are getting a sizeable refund....BUT it's because I had my 2nd little deduction on 12/30 and we replaced our heat pump for the energy credit.

In the past, we've fallen into the group that has paid significant amount thru w/h then only gotten small refunds and wondered why we are footing the money for the people who hardly pay anything in and still get huge refunds! Even this year with our bigger refund from the extra credits we could claim, we're still only getting back about half of what we paid in during the year.

 

[MagicKingdom05]

We are actually getting back about $2000 more this year, which was expected since we had our 2nd daughter on Dec 26, 2009.