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

[SaraJayne]

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.

She was a "working member of society before" ~ she just wasn't paid for it.

 

[Acklander]

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.

In the OP's situation, it sounds like her husband works and instead of being a SAHM she picked up, what I would assume is a PT job (being that she made 6K for the entire year). with the extra 3K in taxes, plus the daycare expenses over the summer and school vacation she's was questioning if it was worth it for her to continue to work. I think it's a question every family wonders when deciding if they should stay at home with the kids or go back to work.

 

[SaraJayne]

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.

It isn't like she's laying at home, eating bonbons all day, watching her hubby rub his gut and belch.

Her DH works and is a tax paying citizen.

 

[wvjules]

It isn't like she's laying at home, eating bonbons all day, watching her hubby rub his gut and belch.

Her DH works and is a tax paying citizen.

Until they get back all he paid in and then some. Her working and them losing the EIC is what makes them tax paing citizens. Prior to that, technically, they were not.

I didn't pay a dime in taxes for years becasue I got back more than I paid in. I was not a tax paying citizen then.

ETA: I'm referring to Federal INCOME taxes.

 

[tinker&belle]

Until they get back all he paid in and then some. Her working and them losing the EIC is what makes them tax paing citizens. Prior to that, technically, they were not.

I didn't pay a dime in taxes for years becasue I got back more than I paid in. I was not a tax paying citizen then.

Even you didn't pay federal taxes you still payed FICA and possibly state and local taxes depending on where you live. (If there only was a FICA deduction!)

 

[Acklander]

But the EIC goes a step further, its actually paying people with our tax dollars to live in this country...

We pay many taxes in this country, not just income tax. The EIC is refunding some of those other taxes back to those who earn the least.

Lets say you spend $1000.00 a year on gasoline to get to work, of which $500.00 of that is paid in unseen taxes. A person who makes $100K a year is paying .005 percent of his income in gasoline tax. While a person who makes 10K a year is paying .05 percent of his income on gasoline tax. Big difference. The government is refunding back a portion of that gasoline tax to the lowest earners in the form of an EIC. They are not paying people with YOUR tax dollars to live here. These are people who already live here, work here, and contribute to society in many ways - just at this time in their lives they aren't able to contribute financially to the tax base. You have soldiers who are able to take the EIC, you have preachers who are able to take the EIC, you have social workers who are able to take the EIC, you have child care workers who are able to take the EIC - There are many hard working people out there who contribute to society in many ways beyond financially,and their only crime is that they don't make that much money. who am I to get pissy about the government giving them back some of the gas taxes, or electric bill taxes, or whatever other taxes they have contributed towards besides income tax, while at the same time I'm writing off my mortgage, and business expenses, and property taxes.

 

[SaraJayne]

Until they get back all he paid in and then some. Her working and them losing the EIC is what makes them tax paing citizens. Prior to that, technically, they were not.

I didn't pay a dime in taxes for years becasue I got back more than I paid in. I was not a tax paying citizen then.

ETA: I'm referring to Federal INCOME taxes.

I won't ever begrudge anyone LEGAL help they are receiving. I just thank my lucky stars it isn't me.

I don't despise the working poor or look down my nose at them, like many in this thread are. It isn't "welfare", no matter how loudly or how long you say it.

 

[SaraJayne]

We pay many taxes in this country, not just income tax. The EIC is refunding some of those other taxes back to those who earn the least.

Lets say you spend $1000.00 a year on gasoline to get to work, of which $500.00 of that is paid in unseen taxes. A person who makes $100K a year is paying .005 percent of his income in gasoline tax. While a person who makes 10K a year is paying .05 percent of his income on gasoline tax. Big difference. The government is refunding back a portion of that gasoline tax to the lowest earners in the form of an EIC. They are not paying people with YOUR tax dollars to live here. These are people who already live here, work here, and contribute to society in many ways - just at this time in their lives they aren't able to contribute financially to the tax base. You have soldiers who are able to take the EIC, you have preachers who are able to take the EIC, you have social workers who are able to take the EIC, you have child care workers who are able to take the EIC - There are many hard working people out there who contribute to society in many ways beyond financially,and their only crime is that they don't make that much money. who am I to get pissy about the government giving them back some of the gas taxes, or electric bill taxes, or whatever other taxes they have contributed towards besides income tax, while at the same time I'm writing off my mortgage, and business expenses, and property taxes.

Alright, I should have just agreed with this post.

 

[PrincessDreams2]

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

I was thinking the SAME thing about my 1300 sq ft ranch! I will never look at it the same way again!!!! Welcome to my McMansion!

 

[indimom]

I also think Acklander hit the nail on the head.

I have to add that I don't see how a flat tax would ever work. There are so many things that effect a person's ability to pay taxes that do not relate directly to their INCOME. There are people in this country with debilitating medical bills that they are allowed to deduct at tax time. I wouldn't want that taken away from them. And I wouldn't want the EIC taken away from those who need it either.

 

[HHSTigerFan]

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

Its a small part of a big problem, too many people paying NO income tax and expecting corporate America and the productive members of society paying their way..

 

[HHSTigerFan]

Her DH works and is a tax paying citizen.

If they had a $6000 refund and eligible for EIC, you sure about that?

 

[HHSTigerFan]

A person who makes $100K a year is paying .005 percent of his income in gasoline tax. While a person who makes 10K a year is paying .05 percent of his income on gasoline tax. Big difference.

The person making $100K is probably paying about $20K-30K in different taxes, the person making $10K is receiving up to $5666 in EIC, perhaps another $5000 in food stamps and whatever the cost of Medicaid is...

Its not the IRS's job to redistribute wealth, its to collect taxes..

 

[wvjules]

I won't ever begrudge anyone LEGAL help they are receiving. I just thank my lucky stars it isn't me.

I don't despise the working poor or look down my nose at them, like many in this thread are. It isn't "welfare", no matter how loudly or how long you say it.

I was the working poor. I received it for MANY, MANY years. It is a form of welfare. The credit is there so take it. It would be silly of anyone not to take it since it is written in to the tax code that way and I don't think anyone here is suggesting that. Everyone should take the credits and deductions that are allowed by law.

The purpose of the credit is encouraging people to work. Great! However the OP is using the credit, or not receiving it, as a reason NOT to work. Seem a little backwards to you?

 

[bumbershoot]

I think it's mis-named - the earned part is confusing.

It is a credit based on your earned income. Best name for it, very descriptive as long as you keep "earned" and "income" together in your head.

Personally, I think it's unfair that homeowners get to write off all that interest paid to the bank from their income, where as renters don't get that write off. so, you've got 2 people who make the exact same income, same amount of kids, but the homeowner pays much less in taxes than the renter - even if they pay the same amount in housing expenses; but we don't call that "welfare". Why is that?

I think it's unfair as well. My landlady no doubt gets to deduct the interest she pays, but we don't, even though WE are paying it FOR HER. That money isn't coming from HER!

Because one is an incentive to buy a house,

Ah yes, what a great reason to buy a house, so that you can deduct interest. Possibly that's one of the reasons the housing market did what it did...some people being convinced by family and friends that it's SO much better to take out a huge loan and deduct the interest...

Yay, I never get it when people say that they cannot do something or they'd lose money by doing it, because it would move them into another tax bracket. Sure, they're marginal tax bracket may change, it isn't like all of their income is taxed at the marginal rate.

But if you are losing a good portion of that second income, it has a big impact! So it doesn't *matter* that you're not paying the higher percentage on the whole amount, what matters is that it diminishes the value of that second job.

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

I'd guess the same thing.

If they had a $6000 refund and eligible for EIC, you sure about that?

YOu sure about what you read in the OP?

"I worked part-time last year earning $6,000. Our tax return is going to be nearly $3,000 less than if I hadn't worked at all"

She *earned* 6K. Because of that, 3K of their normal refund is gone. That doesn't mean that she was getting a 6K refund; could have been 3500 normally...

 

[indimom]

If they had a $6000 refund and eligible for EIC, you sure about that?

She didn't say the refund was $6,000. She said that was what she earned on her part time job.

 

[sam_gordon]

I also think Acklander hit the nail on the head.

I have to add that I don't see how a flat tax would ever work. There are so many things that effect a person's ability to pay taxes that do not relate directly to their INCOME. There are people in this country with debilitating medical bills that they are allowed to deduct at tax time. I wouldn't want that taken away from them. And I wouldn't want the EIC taken away from those who need it either.

Regarding my thoughts on a flat tax... let's say I'm in the 20% tax bracket based solely on my income. BUT, because of deductions, credits, etc, I only pay 10%. So why not just let me pay the 10% and be done with it? Why should I pay less in taxes simply because I have a child or a house?

 

[HHSTigerFan]

It isn't "welfare", no matter how loudly or how long you say it.

It absolutely is welfare... are we to the point in society where we now don't consider freebies welfare, rather something they just deserve?

 

[HHSTigerFan]

She didn't say the refund was $6,000. She said that was what she earned on her part time job.

She said her refund was $3K less, the average refund is around $3K, thus the $6K I tossed out there..

 

[EclecticWAHM]

FYI - Not everyone who gets an EIC is avoiding work. My BFF is a social worker with 3 kids and she gets it. I've never met anyone who works harder and for less. I told her that she had better apply for foodstamps too because as far as I'm concerned, if anyone is owed that, she is. She provides an absolutely critical service to society and gets paid peanuts for it

This is true. We got EIC when dh was out of work for half the year due to injuries from a car accident that was not his fault. It was a Godsend at the time. Even though our refund is smaller this year, I am SO grateful to NOT qualify because that means we're doing better than we were.