Can you only receive tax deductions up the the amount you pay in taxes or can the gov't owe you more?

Answer 1

You have hit upon something that in fact can happen, but not often for individuals.

If your deductions are greater than your income, you may have a net operating loss (NOL). One example of how an individual can have a net operating loss is a casualty loss (such as occurred with Hurricane Katrina). There are other cases, mostly related to business income losses.

If you have a NOL, you can use the NOL to reduce income in other years. So in effect you are using the negative number for one year to cancel out income in another year, so you will be getting more tax back because of the negative number.

There are many more details about NOL in IRS Publication 536

http://www.irs.gov/pub/irs-pdf/p536.pdf

Answer 2

It depends if your exemptions/deductions zero out your tax before the refundable credits kick in. In some cases, you can have the total tax as zero, but then have a refundable credit added to the zero, which you will get a check for.

Answer 3

If you're asking if it's possible to get a refund bigger than the amount paid in, yes it is, through refundable credits. There aren't many of these, but the Earned Income Credit or Additional Child Tax Credit can result in a refund larger than what was paid in.

Answer 4

There are refundable credits that allows you to get more money even when your tax is zero. The earned income credit is a refundable credit, as well as the additional child tax credit.

http://www.irs.gov/app/understandingTaxes/pdf/hows/module09/IM09lp.pdf

Answer 5

If you mean can you get more money back than you make the answer is NO! You only get back the deductions the government allows and that you better hope you can prove if needed.

Answer 6

If your deductions exceed your income, your taxable income would be zero. Any taxes withheld would be refunded to you, but you won't get any "reverse" income tax if your deductions exceed your income. I only wish...