Tax return is nearly $3000 LESS because I worked part-time last year!

[DawnM]

Again, this is an over generalization from you. While I agree that it MAY NOT be beneficial to have a larger mortgage for tax purposes, many of us deduct more than just our mortgage on those forms. Our mortgage COMBINED with our other deductions, does help.

I don't know what you define as a McMansion either. We do pay more than $1,500 in interest on a 15 year loan that is about 25% of our takehome pay.

Dawn

This is wrong. Not all homeowners can deduct their interest. Only McMansion owners. I get $11,400 standard deduction same as a renter does. I pay interest on my home loan, but I'd have to pay to the tune of about $10,000 in interest to itemize, not the $1500 I do pay.

 

[luvsJack]

Why does no one realize that there are 24 hours in a day. Both my wife and I work, we have 2 kids, and there is one parent home at all times with the kids. I work during the day and my wife works during the evenings. She is there for when they are off school, sick, and the summers and I am there in the evenings. You don't need daycare for both parents to work.

Sounds like that works great for you, but it wouldn't work for everyone. My dh drives a truck, he is gone Mon-Fri and many weekends. If we had a little one again, I would have to have child care for both of us to work.

Everyone's situation is not the same. Also, you have to actually be able to find jobs that work that way together. You were lucky enough to do that, not everyone is so lucky. Even if the timing is only off by an hour or two, someone has to be supervising those children.





I received EIC for the years I was a single mom. I worked two jobs and worked darn hard at both of them. So do not tell me that EIC is a "handout". Its not. I was glad when I finally made enough money that I didn't qualify for it, but I was making a heck of a lot more than $6000 a year too.


OP, I would sit down with a calculator and figure every dime that going to work costs you and really see if it is paying you to work. If not, quit.

 

[tlbwriter]

This is wrong. Not all homeowners can deduct their interest. Only McMansion owners.

Wow, I had no idea my 1700 sq ft house was a McMansion! I feel so important now.

 

[crisi]

Two things....

At the end of the year, did working increase or decrease the amount of disposible income you had? You can pay more in taxes, but if you pay $3,000 more in taxes, and end up with $8,000 more in your pocket, it might be worth it. But you have to do all the math - including what your working expenses and daycare expenses are.

EVEN AFTER you do that, you may want to work - EVEN IF you don't break even on holding the job. This seems really counterintuitive, but there are cases where it makes good sense. If a continual work history positions you for better incomes when your kids are done with childcare, for instance. If your work is where health benefits come from. If your spouse's employment is uncertain or his income is spotty. Or if you love what you do.

 

[disneychrista]

In this case..yes, because she isn't doing it on the back of the taxpayers..

For me, in my example, it had NOTHING to do with EIC or anything else, it just doesn't make financial sense to pay out say $8/hr in child care and earn $8.25/hr. We were in a worse financial possiton because I would be paying more in child care than I was bringing home.

 

[disneychrista]

This is wrong. Not all homeowners can deduct their interest. Only McMansion owners. I get $11,400 standard deduction same as a renter does. I pay interest on my home loan, but I'd have to pay to the tune of about $10,000 in interest to itemize, not the $1500 I do pay.

This is so NOT TRUE. It all depends on where you live. And how many people in your family. I get to claim the interst on my 1,100 sq ft McMansion. But my standard deduction is no where near 11,400 closer to 8,400.

 

[crisi]

This is so NOT TRUE. It all depends on where you live. And how many people in your family. I get to claim the interst on my 1,100 sq ft McMansion. But my standard deduction is no where near 11,400 closer to 8,400.

And a lot of those McMansion owners fall victim to AMT and have their deductions curtailed.

Most people who itemize get their deductions to $10k plus through a variety of deductions, not just mortgage. State income tax and property tax can figure in heavily as well. Charitable contributions. But if you don't have enough deductions to itemize, thank your stars for the standard deduction. That standard deduction is a tax break for you - you are getting to deduct MORE than you'd be able to deduct IF everyone was required to itemize.

 

[Green Tea]

OP, don't look at the amount of your refund. That really is irrelevant. Look at the total tax due. That will tell you if you really owe half of your salary by working. The refund is just the amount overpaid by with holding from your checks. It is ZERO indication of how much you actually owe the federal government.

 

[tlbwriter]

But if you don't have enough deductions to itemize, thank your stars for the standard deduction. That standard deduction is a tax break for you - you are getting to deduct MORE than you'd be able to deduct IF everyone was required to itemize.

It took me a long time to "get" that. Before I had a mortgage and a child, I used to complain about not being able to itemize, until someone explained to me that the standard deduction meant I was basically deducting more than I would have otherwise.

 

[Acklander]

However, the interest deduction encourages home buyers. Charity deduction encourages giving to charity. Business deductions encourage small business owners.

And EIC encourages low income workers at entry level jobs to take that initial step up the work ladder instead of not working at all.
And while I'm all for a flat tax rate, or better yet, a national sales tax; until we get to that point, I think it's wrong to select one demographic (in this case the working poor) and call their tax credit "welfare" while feeling justified in taking our own tax deductions or tax credits.

 

[Green Tea]

This is wrong. Not all homeowners can deduct their interest. Only McMansion owners. .

That is not true. Mortgage interest for your primary residence is deductible....be it a small condo, a cabin in the woods or a large home. In this instance, size does not matter......

 

[sam_gordon]

And EIC encourages low income workers at entry level jobs to take that initial step up the work ladder instead of not working at all.
And while I'm all for a flat tax rate, or better yet, a national sales tax; until we get to that point, I think it's wrong to select one demographic (in this case the working poor) and call their tax credit "welfare" while feeling justified in taking our own tax deductions or tax credits.

I just want to point out that my comment you quoted had NOTHING to do with EIC. I was simply pointing out some reasons deductions are allowed. I don't have an opinion (good or bad) on the EIC because I don't know enough about it.

 

[crisi]

That is not true. Mortgage interest for your primary residence is deductible....be it a small condo, a cabin in the woods or a large home. In this instance, size does not matter......

Though I suspect her point is that if the interest you pay is so small that your standard deduction is bigger, then you don't "get" to deduct your interest. Actually, you do, you can still itemize and take the SMALLER deduction you'd get from writing off your mortgage interest, state income tax, charitible contributions, etc. Of course, your deduction would be SMALLER and you'd pay more in taxes, but it would be very fair of you, since you'd only be deducting the amount actually deductible, instead of taking the bonus deduction the government gives people without enough to deduct.

 

[Acklander]

I just want to point out that my comment you quoted had NOTHING to do with EIC. I was simply pointing out some reasons deductions are allowed. I don't have an opinion (good or bad) on the EIC because I don't know enough about it.

I understand that you were pointing out the other deductions were put in place to encourage American people to plan a certain way. I was just stating that the EIC was put in place for the exact same reason as the situations that you presented.

 

[disykat]

This is wrong. Not all homeowners can deduct their interest. Only McMansion owners. I get $11,400 standard deduction same as a renter does. I pay interest on my home loan, but I'd have to pay to the tune of about $10,000 in interest to itemize, not the $1500 I do pay.


.

We've never paid that much interest and we always come out ahead itemizing. This is the first year we have no mortgage interest at all and I think it might be close, so we might end up taking the standard this year.

As others have said, we'll be happy to take the higher of the two!

Like another said, it is kind of fun to think of my 1800 sq ft home as a McMansion though!

 

[HHSTigerFan]

It's not a hand out. It's a tax credit. When you file your taxes do you consider any deductions or credits you may qualify for to be a hand out???

Its just reducing our taxes, perhaps in the case of some its eliminating their taxes... But the EIC goes a step further, its actually paying people with our tax dollars to live in this country...

And we wonder why this country is $14 trillion in the hole??

 

[Marionnette]

And EIC encourages low income workers at entry level jobs to take that initial step up the work ladder instead of not working at all.
And while I'm all for a flat tax rate, or better yet, a national sales tax; until we get to that point, I think it's wrong to select one demographic (in this case the working poor) and call their tax credit "welfare" while feeling justified in taking our own tax deductions or tax credits.

And yet the OP's post is evidence to the contrary. The loss of the EIC is enough to have her reconsidering her place as a working member of society. It is actually a disincentive to seek work when your current income falls just inside the guidelines.

 

[Auggietina]

It's not a tax return -you did not pay too much in taxes. It's a GIFT from the government and the other tax paying citizens. So be glad you even get anything.

 

[Acklander]

And we wonder why this country is $14 trillion in the hole??

I'd guess from financing 2 wars at the same time as giving tax cuts.

 

[SaraJayne]

Its just reducing our taxes, perhaps in the case of some its eliminating their taxes... But the EIC goes a step further, its actually paying people with our tax dollars to live in this country...

And we wonder why this country is $14 trillion in the hole??

The EIC is a teeny, tiny SPECK in the deficit.