Forgive me if this sounds like a stupid question but:
1) Could my federal and state tax refunds be greater than the amount I paid in?
2) Doing my taxes (prelimnary) I am taking some deductions and amount is growing far past my total taxes paid for the year.
Thanks.
2006-12-27 03:46:56 · 10 answers · asked by insurancelawcase 1 in Business & Finance ➔ Taxes ➔ United States
-I have only one child (this year)
-I have earned income (Job) plus an income property
-Some stock trades...which I lost money anyway
2006-12-27 03:52:16 · update #1
The answer to every tax question: it depends.
Most deductions can not be taken over the amount actually owed. You will have to go to zero. However, there are several "refundable credits", such as the Earned Income Credit, that you can receive back even if you are already getting back everything you paid. Read your instructions very carefully and, if the amount of the refund looks extreme, check www.irs.gov to find a free tax clinic near you to help you out.
2006-12-27 03:52:35 · answer #1 · answered by Robin 4 · 1⤊ 1⤋
It's not a stupid question at all, and sometimes the answer is even yes.
It doesn't matter how much you have in itemized deductions. They can only take your taxable income, and therefore your tax, to zero.
There is something called a refundable credit, which means you can actually get back more than you paid in. The most common of these is the Earned Income Credit. People with one child can be eligible for the EIC if their income for the year is under $34,000 for the year, a little less if not filing a joint return.
There are other "refundable credits" although not many. Most credits are non-refundable, which means they might take your tax to zero so you'll get back all you paid in, but not more than that.
On the state side, it depends on the state.
2006-12-27 07:31:52 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Yes, your earned income credit will often boost low wage earners refunds above the amount they paid in. Its a good think for working working couples who dont make a lot of money starting out. I would think you would just use the standard deduction, but I am not looking at your taxes.
What ever you do, dont go and get an instant refund. File and wait, you will pay dearly for the instant refund. Its your money just wait a couple days.
And Clinton DID NOT create the Earned Income Credit. I had it when I was in the Air Force many years ago. Before Clinton,
2006-12-27 03:56:59 · answer #3 · answered by Anonymous · 3⤊ 0⤋
Sure. Your federal refund can be greater by claiming EIC and the child tax & the additional child tax credit. Depending of course on other factors, you could be looking at a few hundred dollars more to a couple of thousand.
Your state can also be more than you paid in. Your state may allow extra credit for Food/Sales tax. Which can also lead to another couple of hundred.
If you rent, you may also qualify for the Homestead Refund. Which is filed seperately from your state return.
My federal refund should be about 3 X's what I paid in. And the state refund should be about 2 x's. (Roughly)
Taxes are tricky but if you do them as accurately as possible, it's not at all impossible to see a greater return.
2006-12-27 05:26:09 · answer #4 · answered by Celeste 6 · 1⤊ 0⤋
It is possible, but unlikely.
I believe, for this year, sales tax or state tax is allowed as a deduction. If you picked sales tax, it is possible that you may get larger return than federal + state tax.
But... tax is based on your adjusted income. All the deduction you can claim will almost never add up to more than your initial income. If you are getting more returned than paid, that means you have negative income.
Since you said your return is FAR PAST the total taxed paid, I am guessing you have an error or two some where.
2006-12-27 03:59:05 · answer #5 · answered by tkquestion 7 · 0⤊ 1⤋
Yes, if you qualify for the "Earned Income Credit" and/or the "Additional Child Tax Credit".
If not, you did something wrong.
2006-12-27 03:49:49 · answer #6 · answered by Wayne Z 7 · 5⤊ 0⤋
Your federal refund could be if you qualify for the earned income credit. This credit is refundable.
2006-12-27 03:57:11 · answer #7 · answered by waggy_33 6 · 2⤊ 0⤋
Yes. earned income credit made by Clinton helps families who did not earn much.
2006-12-27 03:55:05 · answer #8 · answered by Anonymous · 0⤊ 1⤋
It's possible, it all depends on how much was taken out of each paycheck. If they took out a normal amount and with a kid I'd guess you'll be fine though.
2006-12-27 03:54:31 · answer #9 · answered by rishathra7 6 · 0⤊ 1⤋
They give back to you what you paid in excess i assume.
2006-12-27 03:54:37 · answer #10 · answered by maria fkun 4 · 0⤊ 1⤋