WTH?

[averygoodun42]

Right. I don't understand the taxation in this country. How do you get back more than you paid? It doesn't make sense!

That said, I'm now in a better state of mind about the car. If the government really wants to give us money, I'm not going to refuse it, but I still think something's screwy.

Comments

[droxy.livejournal.com]

As individuals you can't, generally. If you can get back more than you paid, I'd like to know how. They may have made a mistake. Also keep in mind, its the total tax bas the govt is looking at. Lets say I owe the govt 30K, but withheld 32K. Straight math says I get my 2K back. If I have other deductions, including state income tax, charity, or excessive medical bills, I could wipe out my tax liability of 30K, so I would get my 32K back. However, I could not get 40K back since my liability was only 30K....unless.....its something really odd like the first time homebuyer thing.

Its so damn complicated, wipe it out. Everbody pays. 10%. Flat tax!

[cecelle.livejournal.com]

This year, there is also the $ 800 "Make Work Pay" refundable tax credit, in addition to the refundable child tax credit ($ 1000 per child) and the Earned Income Credit. You can get a refund of a few thousand even if you put very little or nothing in. My son, who only worked three months last year, got back a credit of $1600 (everything he paid in plus the "Make Work Pay" Credit. Which sort of made me laugh.)

[droxy.livejournal.com]

Now I am derpressed. I bet I dont qual dor that.

[cecelle.livejournal.com]

Everyone qualified for that one, but for most of us, it resulted in slightly less taxes being taken out over the year (since it was supposed to stimulate the economy, and employers adjusted the tax schedule right away) and thus didn't result in a bigger refund.

[averygoodun.livejournal.com]

Tax liability of $30K? How about a wage of $30K?

As everyone else pointed out, it's the credits that are to blame. Still kind of screwy accounting, though.

[blueartemis07.livejournal.com]

Refundable credits. That is the only way to get back more than you paid.

droxy is right, though. It is too complicated.

[droxy.livejournal.com]

How does one get a refundable credit?

[blueartemis07.livejournal.com]

If you earn under a set amount you can get the Earned Income Credit. If you have a child, you can get the Child Tax Credit. There are a few others. I think the new home buyers credit is one of those, and there is something about the sales tax on the cars this year.

[droxy.livejournal.com]

-sighs- I am considered wealthy. (LOL) I guess I'll have to sell my minks, diamonds, rolls, and fire the servants.

[averygoodun.livejournal.com]

Yes, that's how, but... It is too complicated.

[cecelle.livejournal.com]

It is strange. The whole refundable credit thing - we know a couple with several kids that paid in about $2000 and got back $ 7000, between the child credits and the earned income credit.

But the money sure comes in handy. ;0)

[averygoodun.livejournal.com]

If we hadn't got the reimbursements, we would be getting more than double our payout due to EIC. 0_o

But yes, the money does come in handy. :-)