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My son made 10,777 last year as a graduate student. He paid in 1002.00 in federal income tax. He did get tax credit for Lifetime Learning Credit, but Turbo Tax also figured in 103.00 in Earned Income Credit because he fell within the guidelines. According to Turbotax, he's entitled to a refund of 1,024.00 even though he only paid in 1002.00

2007-02-18 04:34:18 · 5 answers · asked by coupe 2 in Business & Finance Taxes United States

5 answers

If you have refundable credits it's entirely possible to get FAR more back than you paid in.

The EITC is an excellent example of that. I have a friend who is a single parent with 2 kids and makes about $16k a year. She paid in about $650 last year. With her 2 kids and HoH filing status, she has no tax liability so all that comes back to her. The EITC payment adds several thousand $$$ to her refund check on top of the amount paid in.

PS: I'm shocked that the CPA got this wrong! Must specialize in corporate taxes!

2007-02-18 04:56:43 · answer #1 · answered by Bostonian In MO 7 · 4 0

It's very possible. He was a student so he qualified for a credit. he qualified for the EIC which is money back even if you are already owed a refund or if even if you ended paying nothing in taxes after the deductions. I know someone who qualified for the EIC and in the end she only had to pay 10 dollars for the entire year of taxes. She got everything else she put in back.

There was a post here about someone who was getting back 4000 just from the EIC credit alone.

2007-02-18 12:49:01 · answer #2 · answered by Emma S 2 · 1 0

First of all, I wouldn't necessarily trust the Turbotax calculation. I'm a CPA and although I think that program and Tax Cut are good, I have found errors in both programs in the past.

Did your son qualify for the long distance telephone credit? If so, because of a new tax law the IRS is actually giving taxpayers a rebate of up to $30. This is the only instance that I can think of that would result in a refund larger than the tax withheld.

2007-02-18 12:42:35 · answer #3 · answered by Kim T 2 · 0 5

if you have children you get more for earned income plus your taxes can be reduced with the child tax credit...this is to help the cost of raising children..you should be happy with your son getting some help back as my husband and I piad in almost $5000 and only got back $900...

2007-02-18 12:37:52 · answer #4 · answered by bnd 3 · 0 0

alot of people get the EIC.......I know people that I work with that ended up with double what they paid in because of this program. I wish that was around when my husband and I where poor!!!

2007-02-18 12:38:14 · answer #5 · answered by irish eyes 5 · 0 0

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