Just wondering here b/c something doesn't seem right to me...
My husband started his own business last year and we just got our taxes done tonight. He ended up making about $150,000, but $100,000 of that went to his employees and at least $25,000 were things that could be written off(tools, nails, materials, ect)...
How is it that all we got back was $500? It just doesn't seem to make sense to me. We also have one child we claim and I stay home and don't have an income.
2007-02-10 14:19:05 · 6 answers · asked by ALG 2 in Business & Finance ➔ Taxes ➔ United States
How much had you paid in estimated payments? Your refund depends on that, not on how much he made or what he had in deductions. It's your total tax that is determined by what your taxable income is. Your refund is just what you paid in over what you were required to. If you had paid in an extra $1000 a month, your refund would have been $12,500 - you'd have just been getting your own money back, not saving anything in taxes.
2007-02-10 14:24:10 · answer #1 · answered by Judy 7 · 1⤊ 2⤋
The posters above are correct--- it all depends on what he paid for the estimated taxes. But in general, you do NOT want a big tax refund. You want your refund or payment due to be as close to 0 as possible. If you get a big refund, then you're overpaying on the estimated taxes (or the withholding, on a regular employee paycheck). Your tax liability/bill is the same at the end of the year, no matter if you are paying $50 or $500 a week towards the eventual bill. Getting a big check back means you paid too much to begin with--- which is basically giving the government an interest-free loan.
2007-02-10 22:40:15 · answer #2 · answered by dcgirl 7 · 0⤊ 0⤋
If everything was input correctly, he apparently made the correct amounts of Estimated payments through the year. which resulted in a refund, maybe not a hugh one, but better a refund than owing taxes. Between the Estimated payments and any credits that you were eligible to take you just about broke even,
2007-02-10 22:27:15 · answer #3 · answered by Rob 7 · 1⤊ 0⤋
You got "only" $500 back because that's all that the government owes you. To get a larger refund you would have had to pay in more tax during the year, effectively giving the Government an interest free loan. Without seeing the return I can't give you a detailed explanantion, but that's the basic fact.
2007-02-10 23:17:13 · answer #4 · answered by Bostonian In MO 7 · 0⤊ 2⤋
GET a copy of the return and look at the figures.....You say that your husband made $150000 but you didnt say how much of that he paid in taxes.
Is he paying taxes on the money he makes as he goes (every pay period). I would guess not but you would know better than I would. The reason that people that work for others get a refund is that they have money taken out every pay period that goes directly to the federal government. If you are self employed, then it is up to YOU to do that
most dont
But just based on what you have said here, you can look it up yourself.
$25,000 for a family of three would qualify you for waaaaay more than $500.00
Please tell me that you didn't go to H& R Block.
If so you got back way more but you lost it to Rapid refund anticipation loans and the associated fees.
2007-02-10 22:30:29 · answer #5 · answered by kissmymiddlefinger 5 · 0⤊ 5⤋
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all the best
2007-02-11 00:48:51 · answer #6 · answered by hary s 1 · 0⤊ 3⤋