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  #1  
February 16th, 2009, 10:24 AM
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What is up with people getting HUGE refunds? I know there is a child tax credit if you have kids, but I thought it only reduces the amount of tax you owe except in certain circumstances where you can get money back (not sure what those circumstances are). I mean, I see people getting back thousands! That is a lot of overpayment of your taxes, unless I am missing something?

I usually get a small federal return to which we pay the state. We always owe the state, it is ridiculous. Even when I change our with holdings. But it isn't much and balances out (about a $300 retuen and $100-200 owed to the state usually). Dustin started working a pizza job last year to bring in extra cash, and he only withheld $13 for federal and $6 for state He gets paid every week so you know how that can mess it up, and we never got around to making allowances elsewhere. But it worked out ok this time.
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  #2  
February 16th, 2009, 10:45 AM
♥Ashley♥'s Avatar Platinum Supermommy
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Yea, my sister only worked for 2 months last year right before she had her son in December (for a bill collector making like a little above minumum wage) and she got $3900 back in taxes!!! Obviously it wasnt overpayment for her because she only worked 2 months and only made a little more than minimum wage!!! So I dont know where it came from, apparantly you get alot when you have a baby as a dependant!!
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  #3  
February 16th, 2009, 10:59 AM
*Mrs.J.2011*'s Avatar Platinum Supermommy
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I dont claim anything.. on my W2, it's "zero" between state and fed I got back a couple of thousand.. and so did Chris. My tax returns have always been about the same, even when I was 16. Granted I was working a full time job then too, but not making nearly what I do now.. so I'm not sure how that works! haha
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  #4  
February 16th, 2009, 11:07 AM
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Quote:
I dont claim anything.. on my W2, it's "zero" between state and fed I got back a couple of thousand.. and so did Chris. My tax returns have always been about the same, even when I was 16. Granted I was working a full time job then too, but not making nearly what I do now.. so I'm not sure how that works! haha[/b]
So you don't withhold anything, have no kids, and get money back?

...............................................

I just looked it up, and I guess it is the Additional Child Tax Credit that gives couples money for having kids. From what I read, if you are under certain income limits using this credit you can get back a portion of or all of the Child Tax credit (which I think is $1,000 per qualifying child) that is left over after deducting what you owe for taxes. Anyone please feel free to correct me if I am wrong.
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  #5  
February 16th, 2009, 11:12 AM
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Kaleigh maybe you are getting the Earned Income Tax Credit?
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  #6  
February 16th, 2009, 11:13 AM
♥Ashley♥'s Avatar Platinum Supermommy
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I didnt mention my own situation because I thought you were only asking about people with children, but I also claim only myself (have no kids obviously) and always get around $1000. This year I only got $800.
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Cycle #1-9 - All Natural....5BFN's, 4BFP's (all ended in miscarriage)
Cycle #10-11 - Met with first RE, diagnosed with heterzygeous MTHFR mutation & slightly low SA on all counts. -BFN, Cycle #12 - First IUI+Trigger - BFN, Cycle #13 - BFN
Cycle #14-15 - Met with new RE, diagnosed with a blocked right tube that previous RE completely overlooked or didnt care to mention. Soy (120mg) - BFN
Cycle #16 - Clomid (100mg) - BFN, Cycle #17 - Clomid (100mg)+Trigger+IUI - BFN
Cycle #18 - Acupuncture+Clomid (100mg) - BFN
Cycle #19-27 - 2 Soy (160mg) cycles, the rest all natural also 30lbs lost!! - BFN's
Cycle #28 - New RE is GREAT! Put on bcp 7/6/11, Lap surgery 8/1/11- Tubal cyst (5cm) found and removed, Uterine Septum removed, and Stage II-III endo removed. Cycle #29 - All Natural - BFN, Cycle #30 - All Natural - BFN, Cycle#31 - All Natural - BFN, DONE TTC FOR NOW




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  #7  
February 16th, 2009, 11:14 AM
bittersweet's Avatar Mega Super Mommy
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I think it has to do with what tax bracket you are in. If you make more money, you owe a higher % in tax. On the FP board they posted a thread about tax brackets. Plus not every owns property and such to pay taxes on so they dont owe as much. Not to mention kids are a big deduction. We usually get b/w 1-2K back. I claim 1, DH claims 0. We are enjoying it while we can b/c after next year, with our income increase we'll always owe.
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  #8  
February 16th, 2009, 11:22 AM
Resi's Avatar Platinum Supermommy
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This is the first year we have not had to pay in. The last 4-5 years we paid. We could not take the Additional Child Tax Credit because we make too much. However, we got back $2100 total state & federal! I was happy. It all went to paying off bills though.

Michelle, next year you should get something back with your little one to claim.
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  #9  
February 16th, 2009, 11:23 AM
~Jess~'s Avatar Platinum Supermommy
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Michelle, the child tax credit is a credit, not a deduction. For example, this year, after all our deductions, our tax liability is right around $2000. We have 3 kids and get a $1000 credit for each of them, so we are getting a refund of $1000! They basically pay you $1000 cash each year for each kid you have!

Quote:
Yea, my sister only worked for 2 months last year right before she had her son in December (for a bill collector making like a little above minumum wage) and she got $3900 back in taxes!!! Obviously it wasnt overpayment for her because she only worked 2 months and only made a little more than minimum wage!!! So I dont know where it came from, apparantly you get alot when you have a baby as a dependant!![/b]
She would have qualified for the Earned Income Credit (for being considered below poverty level) as well as the child tax credit.



Quote:
I dont claim anything.. on my W2, it's "zero" between state and fed I got back a couple of thousand.. and so did Chris. My tax returns have always been about the same, even when I was 16. Granted I was working a full time job then too, but not making nearly what I do now.. so I'm not sure how that works! haha[/b]
On your w2 is says 0, or on your w4 you claim 0? Those are 2 very different things? If you paid zero in taxes & don't have kids, I don't see how it's possible for you to get a refund. But if you claim 0 on your w4, that means they deduct more from your paycheck and it would make sense that you would get a big refund.

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  #10  
February 16th, 2009, 11:28 AM
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Yeah, I have never qualified for any refundable tax credits so far. We make too much for the earned income credit, and have no kids yet. It boggles me how much people are getting back due to overpayment. But I hate deductions out of my paychecks so I suppose I just like to keep it as even as possible. If it weren't for education credits we get, we would get nothing back from the feds b/c we basically only pay what is required, and don't qualify yet for any refundable credits.

Quote:
Michelle, the child tax credit is a credit, not a deduction. For example, this year, after all our deductions, our tax liability is right around $2000. We have 3 kids and get a $1000 credit for each of them, so we are getting a refund of $1000! They basically pay you $1000 cash each year for each kid you have!

Quote:
Yea, my sister only worked for 2 months last year right before she had her son in December (for a bill collector making like a little above minumum wage) and she got $3900 back in taxes!!! Obviously it wasnt overpayment for her because she only worked 2 months and only made a little more than minimum wage!!! So I dont know where it came from, apparantly you get alot when you have a baby as a dependant!![/b]
She would have qualified for the Earned Income Credit (for being considered below poverty level) as well as the child tax credit.



Quote:
I dont claim anything.. on my W2, it's "zero" between state and fed I got back a couple of thousand.. and so did Chris. My tax returns have always been about the same, even when I was 16. Granted I was working a full time job then too, but not making nearly what I do now.. so I'm not sure how that works! haha[/b]
On your w2 is says 0, or on your w4 you claim 0? Those are 2 very different things? If you paid zero in taxes & don't have kids, I don't see how it's possible for you to get a refund. But if you claim 0 on your w4, that means they deduct more from your paycheck and it would make sense that you would get a big refund.


[/b]
I know it is a credit, but I thought you can only get the excess (the amount that is leftover after reducing the tax you owe) if you make under a certain amount?

Adn then I thought they called it the Additional Child tax credit at that point.

I should think we will qualify for that next year I hope!
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  #11  
February 16th, 2009, 11:31 AM
~Jess~'s Avatar Platinum Supermommy
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Quote:
I know it is a credit, but I thought you can only get the excess (the amount that is leftover after reducing the tax you owe) if you make under a certain amount?

Adn then I thought they called it the Additional Child tax credit at that point.

I should think we will qualify for that next year I hope![/b]
I don't know. Our CPA does ours. I guess we must make under that certain amount, lol.
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  #12  
February 16th, 2009, 11:38 AM
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I looked it up, and we are not making over 100K next year, so as long as our tax liability is calculated to be less then $1,000, we should get some of this free moola. I think so anyways.

Does anyone know if the child tax credit is calculated based on your tax liability after all other deductions and credits are applied? (like after education & retirement savings credits are applied to reduce what you owe, then the refundable additional child tax credit can be applied?) I hope I am making sense, I'm sure Turbo tax can tell me the answer when I file next year, but I want to know now! I am obsessing.
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  #13  
February 16th, 2009, 11:42 AM
*Mrs.J.2011*'s Avatar Platinum Supermommy
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I think I meant my W4.. they withhold the most possible amount and so I get the excess back..
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  #14  
February 16th, 2009, 11:48 AM
IamMom's Avatar Mega Super Mommy
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Hey gals - just thought I'd put my two cents in - I'm a CPA so if anyone has any questions you can PM me!

There are very few refundable tax credits (or money you get without paying in - basically welfare - the government just giving you money). You really can't make very much to qualify for these. The refunds most poeple get come from paying in more in withholding or estimates than you really needed to, as other posters have said. We got a huge refund both last year and this year because my hubby withholds at the single rate with no allowances (we know we have to change this we just haven't gotten around to it). So basically he withholds way more than he needs to.

Michelle - its best to pay in exactly what you owe - no more no less. So the way you guys are doing it is perfect. You're getting to use your money sooner - time value of money, or if you invest it - you're getting interest on it. Paying in exactly what you need to means that way the government isn't holding your money all year without paying you interest (which is what happens when people get refunds...refunds are not great in the overall scheme of finances).
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  #15  
February 16th, 2009, 11:54 AM
IamMom's Avatar Mega Super Mommy
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Quote:
I looked it up, and we are not making over 100K next year, so as long as our tax liability is calculated to be less then $1,000, we should get some of this free moola. I think so anyways.

Does anyone know if the child tax credit is calculated based on your tax liability after all other deductions and credits are applied? (like after education & retirement savings credits are applied to reduce what you owe, then the refundable additional child tax credit can be applied?) I hope I am making sense, I'm sure Turbo tax can tell me the answer when I file next year, but I want to know now! I am obsessing.[/b]
This is all 2008 info:

The child tax credit is not refundable - which means it can only reduce the taxes you already owe - so you would not get free moola. If you qualify for the additional child tax credit you may get free moola. Say you owe $1,000 and paid in $1,000 - if you have one child - you get your $1,000 back - not free but you get it back. If you owe $500 and pay in $500 you get that back - the other $500 may be gotten through the additional child tax credit if you qualify...that is refundable. (But the threshhold is like $8,500 - which is pretty low)

Also - you will get the whole $1,000 per child if you have less than $110,000 AGI married filing joint. After that threshold it starts to phase out.

Does that make sense - Turbo tax will probably calculate all this for you and give you things you qualify for automatically.
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  #16  
February 16th, 2009, 11:54 AM
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Oooh, you are a CPA! I have a weird fondness for CPAs. It is really strange since I can't afford one I always think a CPA is something only rich people have. That, and a lawyer.
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  #17  
February 16th, 2009, 12:00 PM
IamMom's Avatar Mega Super Mommy
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HE HE HE - I love it when I'm compared to a lawyer or a doctor...someone else who had to take a test to get letters behind their name. I work in a small firm where we definitely do taxes for people who are not rich....we don't charge as much per hour as some CPA firms cause we don't do really complex stuff. But we still charge and some people would rather take a chance and just do it themselves if its not too complex. For some, the small fee gives them a piece of mind that they have things right - have maxed deductions and credits - and have someone to turn to in the event they get audited!
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  #18  
February 16th, 2009, 12:16 PM
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Quote:
For some, the small fee gives them a piece of mind that they have things right - have maxed deductions and credits - and have someone to turn to in the event they get audited![/b]
Thats why I have H&R Block do mine They've always gotten us the most $$ for tax returns. 3 years in a row

~Beth
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  #19  
February 16th, 2009, 12:57 PM
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Last year I claimed 0 and I believe DH claimed 1. We have a lot of write-offs between the interest on our house, our mileage, cell phones, etc. We got back $6700. Obviously this year we changed our withholdings
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  #20  
February 16th, 2009, 01:35 PM
Adriana's Mommy's Avatar I <3 my kids
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Last year my DH and I claimed zero and we had $6,500 + back.. This year I claimed one and we got back $4,000.. My DH is going to claim one more so we can get more money when we get paid, instead of the end of the year.. Why should I let the gov't earn credit from my money.
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