Finally ! A decent tax return!

[mizzou]

Finally got a few K back for a tax return, last few years I got barely a few hundred.

This was very unexpected, and mainly because my household income dropped and put me into a lower tax bracket (not by much)

Hmm... repair my deck? get a toilet in my basement? or a nice AR-15?


decisions decisions

 

[Matthiasa]

That only means you overpaid by even more then last year.

 

[OILFIELDTRASH]

I'm glad all my hard work paid off for you.

 

[mizzou]

That only means you overpaid by even more then last year.

I think a few hundred is a spot on return....er as close as it gets when you consider I have no clue how much $ i'm bringing in on my small investment.

It's just amazing how much your tax bracket can impact everything, I didn't expect to net that much less in 2009

 

[Homerboy]

You dont want to get a few K back. That means you overpaid and gave Obama an interest free loan for the year. Well played!

 

[CPA]

Finally got a few K back for a tax return, last few years I got barely a few hundred.

This was very unexpected, and mainly because my household income dropped and put me into a lower tax bracket (not by much)

Hmm... repair my deck? get a toilet in my basement? or a nice AR-15?


decisions decisions

I would hardly call this a decent tax return, rather horrible fiscal management on your part. You don't want a large tax refund, that only means you gave the snakes in Washington an interest free loan.

 

[mizzou]

I would hardly call this a decent tax return, rather horrible fiscal management on your part. You don't want a large tax refund, that only means you gave the snakes in Washington an interest free loan.

Awesome, you didn't read anything I posted.

 

[arcenite]

Lots of assumptions being made. High tax returns are nice if credits are involved.

 

[mizzou]

Lots of assumptions being made. High tax returns are nice if credits are involved.

ditto

but to be honest, when I'm comparing 2008 vs. 2009 information, there is such a small diff in household income, and just a modest increase in household credits, i wouldn't have thought it would exponentially increase my return.

just goes to show how much that higher tax bracket hurt us tax wise.

 

[CPA]

Awesome, you didn't read anything I posted.

I read exactly what you posted and I still believe it's due to poor fiscal management on your part. Let me ask you this: did you review your income and taxes at midyear and submit a W4 to adjust your withholdings?

 

[daw123]

Does every person, I'm guessing above 16 years old and working, in the US have to complete a tax return?

I get taxed at source (PAYE) on my income, so I don't have to complete a tax return.

The only time, I have had a tax rebate is when the Inland Revenue / my Employer screwed up my tax code.

 

[Matthiasa]

Yeah, assuming they are working.

 

[mizzou]

Does every person, I'm guessing above 16 years old and working, in the US have to complete a tax return?

I get taxed at source (PAYE) on my income, so I don't have to complete a tax return.

The only time, I have had a tax rebate is when the Inland Revenue / my Employer screwed up my tax code.

My social security statement looks like it's tracked income I made back when I first started working at 14 years old, I had to have a parental permission slip to detassle corn. I believe my w2s went to the parents and it was reported as house hold income? Beats me, I didn't file my own return until I was emancipated at 18 and no longer a dependant

 

[Mr. Pedantic]

I would hardly call this a decent tax return, rather horrible fiscal management on your part. You don't want a large tax refund, that only means you gave the snakes in Washington an interest free loan.

So you'd rather the guy give Washington an interest free gift?

 

[CPA]

So you'd rather the guy give Washington an interest free gift?

huh? wha?

 

[CPA]

My social security statement looks like it's tracked income I made back when I first started working at 14 years old, I had to have a parental permission slip to detassle corn. I believe my w2s went to the parents and it was reported as house hold income? Beats me, I didn't file my own return until I was emancipated at 18 and no longer a dependant

SS statement is dependent on what the employer submitted, not you. The employer has to file a W3 and copies of all W2s to the Social Security Administration.

 

[LostUte]

ditto

but to be honest, when I'm comparing 2008 vs. 2009 information, there is such a small diff in household income, and just a modest increase in household credits, i wouldn't have thought it would exponentially increase my return.

just goes to show how much that higher tax bracket hurt us tax wise.

I don't think you understand how tax brackets work. When you get bumped up a tax bracket, it doesn't mean all of your income was taxed at that level. It means that any dollar you make above the threshold is taxed at the higher rate.

For example, assume there are 2 tax brackets of 10% and 20% The 10% tax bracket is for up to $10,000 and the 20% tax bracket begins at $10,000. That means, someone who makes exactly $10,000 would pay $1,000 in taxes. Someone who made $10,001 would owe $1,000.20 (10% of the first $10,000, plus 20% of the last dollar), and not $2,000.20 like many people assume.

 

[CPA]

I don't think you understand how tax brackets work. When you get bumped up a tax bracket, it doesn't mean all of your income was taxed at that level. It means that any dollar you make above the threshold is taxed at the higher rate.

For example, assume there are 2 tax brackets of 10% and 20% The 10% tax bracket is for up to $10,000 and the 20% tax bracket begins at $10,000. That means, someone who makes exactly $10,000 would pay $1,000 in taxes. Someone who made $10,001 would owe $1,000.20 (10% of the first $10,000, plus 20% of the last dollar), and not $2,000.20 like many people assume.

My guess is much of his refund was related to tax credits.

 

[Eli]

I don't think you understand how tax brackets work. When you get bumped up a tax bracket, it doesn't mean all of your income was taxed at that level. It means that any dollar you make above the threshold is taxed at the higher rate.

For example, assume there are 2 tax brackets of 10% and 20% The 10% tax bracket is for up to $10,000 and the 20% tax bracket begins at $10,000. That means, someone who makes exactly $10,000 would pay $1,000 in taxes. Someone who made $10,001 would owe $1,000.20 (10% of the first $10,000, plus 20% of the last dollar), and not $2,000.20 like many people assume.

Hmm... Is this correct? CPA? EagleKeeper?

I'm no tax expert by any means, but I think as soon as you cross the threshhold, you owe the entirety of the next bracket, so you would owe $2,000.20.

 

[HardcoreRobot]

lostute is right

 

[BUTCH1]

You dont want to get a few K back. That means you overpaid and gave Obama an interest free loan for the year. Well played!

It's true that your not getting any interest on the refund monies but how much would you have made in interest if you faithfully drove to your bank and deposited $35-45 a week for the whole year? I think your interest earnings would be so small that it wouldn't cover the gas to do so. I deliberately have enough taken out every week to ensure I get at least $1-2K every year and like the fact that I can look forward to this time of year for a cash boost!..

 

[KentState]

Hmm... Is this correct? CPA? EagleKeeper?

I'm no tax expert by any means, but I think as soon as you cross the threshhold, you owe the entirety of the next bracket, so you would owe $2,000.20.

If you read the tax brackets, it says if you make up to $X you pay Y% on anything over $X plus the fixed amount $ZZZ. It steps up that way until you are in the top bracket, then you make everything. However, there are some credits that are only available if your adjust gross income is below a certain amount. I know the new car credit had a limit on income as well as some household improvement credits.

 

[Eli]

Interesting, thanks for the info. Didn't realize that.

 

[mizzou]

OK, since we have some tax experts in here, I was always curious about this.

What would your general taxes be for a household that made $71k in 2008 vs.a household that made $68k, assuming generic deductions.

I remember hearing that AMT had something to do after a certain amount of household income, I thought was 70k household

 

[BoomerD]

Hmm... Is this correct? CPA? EagleKeeper?

I'm no tax expert by any means, but I think as soon as you cross the threshhold, you owe the entirety of the next bracket, so you would owe $2,000.20.

Nope, the money is taxed in increments.

Assuming 10% brackets at $10,000 increments:

first $10,000 at 10%,
$10,001 to $20,000 at 20%
$20,001 and over

The person who makes $25,000 pays
10,000* .10 = 1,000 + 10,000*.20 = 2,000 + 5,000 *.30 = 1,500 = $4,500.


FORTUNATELY, the brackets are far wider than that...Hell, someone making $25,000 would qualify for the earned income tax credit if they had children...and would probably get back a sizeable refund...



BTW, this was not a "sizeable return," it was a sizeable REFUND.

The return is the paperwork you file...the refund is money you get back.