Please explain. My friend makes about $34,000 annually and gets $400 a month in child support for 2 illegitimate children. She claims 11 credits on her W2 throughout the year to maximize her paycheck (which is legal) and she still gets like 4k back on her taxes. They are done legally. So it sounds like to me the EIC actually gives you money to work. She ends up with more back than she pays in. Why is that fair? It is not like she is at poverty level. Am I misunderstanding the EIC?
2006-10-31 02:06:10 · 4 answers · asked by mamatohaley+1 4 in Business & Finance ➔ Taxes ➔ United States
I should clarify - I would not call her a friend as much as an acquaintance. The illegitimate children thing is relevant as she keeps getting knocked up by different men and then mooching off of the government. The only reason I still have contact for her is she is intertwined in my group of friends. I can’t avoid her. Plus I love her first child. I was keeping the explanation of our friendship brief for all of your sake but since CANTSTANDRUDENESS finds it necessary to attack me as a person I feel I must defend myself.
With regards to being concerned about how well she is off… $38,800 (annual pay plus child support) is more than enough money to support a family in the Midwest. As she mooches off the government with food stamps and EIC I have to work harder to pay taxes. It is not right. I have never seen her in the same outfit, always impeccably dressed. Eats out 3-4 times a week. Drives a nice car and has everything she wants. Her kids suffer but not from lack of money.
2006-10-31 07:07:20 · update #1
Excuse Me? If she earns "around $34,000.00" the amount of EIC she would have received last year, as head of household with two children, would have been $261.00! You can not imagine how irritating questions like yours get when you hear them year after year! Unless you have all the information, and I mean every last bit of the TRUE information, there is no way to answer your question as to how she gets so much back. (if she even does) But I will tell you this: after 14 years providing tax services on a midwest Indian Reservation I can say that the EIC is a life saver for people who have to work at minimum wage for employers who will not give anyone full time positions to avoid paying employee benefits. At $5.50 an hour, 32 hours a week, 52 weeks a year, the single parent makes $8,580.00. Now don't say that they need a second job because 64 hours a week is a little much to ask a single parent, raising two children, to try to do (although I am sure I'll hear from people who have done it). At least not for long. With the EIC, though, this parent will get $3430.00 when they file their tax return which, effectivly, brings them up to $7.22 an hour. I fail to see a problem with that. The EIC table is based on a sliding scale, ramping up from $0.00, topping out the credit at $11,000 to $14,000 and falling back from there. I would much rather give a hand to someone who is working and trying to provide for their family than give a hand-out to someone who is not!
2006-10-31 03:10:13 · answer #1 · answered by Great Tax Info 2 · 2⤊ 1⤋
Why did you have to say 2 illegitimate children,why not just two children? She has to take care of them regardless. I now this is not the answer to your question but if you were a real friend you would not be concerned about how well off she is, legally.
Would you feel better if she were raising two children at the poverty level?
I think any single parent would love to pay $400 a month to have his/her children well taken care of by the other parent and have the rest of his/her time and money to self.
You are not misunderstanding EIC but the meaning of true friendship.
2006-10-31 02:38:40 · answer #2 · answered by cantstandrudeness 3 · 1⤊ 1⤋
Unfortunately, that's the way the law reads. If she is on her own raising two kids in her house, she can earn up to $36,348 and still qualify for the earned income credit. Of course, the closer you get to that amount, the more your credit is reduced.
That said, I agree with you. I don't consider $36,348 to be poverty level by any stretch of the imagination. I guess when you're a congressman making $162,500 a year, it's all relative.
2006-10-31 02:18:36 · answer #3 · answered by SuzeY 5 · 0⤊ 0⤋
The earned income credit is phased out for her at $36,348 of earned income. It seems like she is getting close to not qualifying.
2006-10-31 02:23:19 · answer #4 · answered by waggy_33 6 · 0⤊ 0⤋