IRS to put Burden of proof on the working poor?

[CADsortaGUY]

Now, I know alot of you think you know how I feel about taxes and credits (net $0 ) but I'm not sure this is a good way to go about fixing the EIC mis-reporting problem.

IRS to Ask Low-Income Families for Proof

<snip>
low-income earners will be asked to bolster their tax returns with proof that they qualify for a tax credit designed to lift the working poor out of poverty.
</snip>

I think that taking the "free" money away would do more to help this situation than creating a "certification" program to regulate it. Spend money to save money?

CkG

 

[CADsortaGUY]

A few more details.

CkG

 

[LunarRay]

EIC is a good attempt at taking money from the middle class and giving it to the lower class. I'd advocate a minimum wage boost to say 11$ per hour and eliminte the EIC if it wouldn't result in a net 0 gain to the poor. The price of goods would inflate up to put the poor and the middle class in worse stead.
(btw.. I got my 400$ advance on my '03 child tax credit... thank you, Cad..)

 

[CADsortaGUY]

Originally posted by: LunarRay
EIC is a good attempt at taking money from the middle class and giving it to the lower class. I'd advocate a minimum wage boost to say 11$ per hour and eliminte the EIC if it wouldn't result in a net 0 gain to the poor. The price of goods would inflate up to put the poor and the middle class in worse stead.
(btw.. I got my 400$ advance on my '03 child tax credit... thank you, Cad..)

Got mine too. $800 that I'm going to go spend like a good little republican sheep.

CkG

 

[DealMonkey]

Maybe you guys can staple your $400 "rebates" directly to your state's 2004 return. Alternately, if you live in CA (I can't remember, but I think so), just endorse that right over to the DMV to cover the increased car tax. Enjoy!

Edit: Woops, sorry - as for the topic @ hand, I don't really see how asking some filers to complete a form is that big of a deal. I don't see how the working-poor affected by EIC will have to spend any money to complete it. Spend some time, sure, but how would they be spending $$?

 

[charrison]

Originally posted by: DealMonkey
Maybe you guys can staple your $400 "rebates" directly to your state's 2004 return. Alternately, if you live in CA (I can't remember, but I think so), just endorse that right over to the DMV to cover the increased car tax. Enjoy!

Most states have managed to balance their budget problems without tax increases.

 

[Zebo]

How does this work CAD? You get free money from the government or just the money you paid in during the year returned back for having kids?

 

[CADsortaGUY]

Originally posted by: Zebo
How does this work CAD? You get free money from the government or just the money you paid in during the year returned back for having kids?

The child tax credit? I'm all for keeping as much of my money as I can until I see the gov't change it's spending habits. Oh, and I paid plenty of income tax, so I'm not in danger of getting "free" money since even after the $800 credit check I'll still pay(net) into the system.

Now back to the topic, one side of me thinks as DealMonkey does but another says that making someone jump through hoops for "free" money isn't going to help solve the problem of some people making money (net) from filing taxes. I think there could be better ways of reducing the tax burden of the "working poor".

Also, my state taxes aren't going to be going up much if any at all.

CkG

 

[Zebo]

Originally posted by: CADkindaGUY

Originally posted by: Zebo
How does this work CAD? You get free money from the government or just the money you paid in during the year returned back for having kids?

The child tax credit? I'm all for keeping as much of my money as I can until I see the gov't change it's spending habits. Oh, and I paid plenty of income tax, so I'm not in danger of getting "free" money since even after the $800 credit check I'll still pay(net) into the system.

Now back to the topic, one side of me thinks as DealMonkey does but another says that making someone jump through hoops for "free" money isn't going to help solve the problem of some people making money (net) from filing taxes. I think there could be better ways of reducing the tax burden of the "working poor".

Also, my state taxes aren't going to be going up much if any at all.

CkG

How does it work exactly? I've read both links and don't understand if it's free money or just a rebate on monies already paid? I've never done my taxes except way back when when single and it was easy EZ so all this is news to me

 

[LunarRay]

Zebo, on the off chance you want to know...

All credits except the EIC are a credit against tax owed. If you owe 0 tax you get 0 credit.

Edit... I guess I could also say... EIC is a credit that acts just like dollars withheld... you get back the balance..

 

[Zebo]

Originally posted by: LunarRay
Zebo, on the off chance you want to know...

All credits except the EIC are a credit against tax owed. If you owe 0 tax you get 0 credit.

Edit... I guess I could also say... EIC is a credit that acts just like dollars withheld... you get back the balance..

So how does the EIC work?

<< does'nt understand how anyone But a trained CPA could do thier own taxes. 55,000 pages and growing. Safer operating on your own kidney stones with a Blacks medical dictionary by your side..

 

[LunarRay]

Zebo,

The EIC is a credit that "rewards" lower earners with a refundable credit that is designed to offset any income tax owed, or fica tax withheld or owed from sch se (fica on net income from business at 15.3% of .9235 of that net income.) EIC is on a sliding scale with the min and max being 0$ credit and the max at a mid point. Folks w/o kids can get it and if you have more than 1 kid you can earn more and still get some.

I am, and can!

 

[SuperTool]

Now I am really confused. I make high 5 digits, and I am single, am I getting this credit or not?

 

[DealMonkey]

Originally posted by: charrison

Originally posted by: DealMonkey
Maybe you guys can staple your $400 "rebates" directly to your state's 2004 return. Alternately, if you live in CA (I can't remember, but I think so), just endorse that right over to the DMV to cover the increased car tax. Enjoy!

Most states have managed to balance their budget problems without tax increases.

I don't know charrison, it seems like most states have either raised taxes or fees (or both). Yes, I consider raising fees to be the same thing as raising taxes.

State-by-state glance at tax, fee changes

 

[charrison]

Originally posted by: DealMonkey

Originally posted by: charrison

Originally posted by: DealMonkey
Maybe you guys can staple your $400 "rebates" directly to your state's 2004 return. Alternately, if you live in CA (I can't remember, but I think so), just endorse that right over to the DMV to cover the increased car tax. Enjoy!

Most states have managed to balance their budget problems without tax increases.

I don't know charrison, it seems like most states have either raised taxes or fees (or both). Yes, I consider raising fees to be the same thing as raising taxes.

State-by-state glance at tax, fee changes

Given the option of fee or taxes, I will take fees. Most of these fees seem to be small. I disagree with extreme tax on cigs, but I thank a smoker every time i get a chance

 

[LunarRay]

Originally posted by: SuperTool
Now I am really confused. I make high 5 digits, and I am single, am I getting this credit or not?

No!

The credit for single ends at about 12000

edit.. the EIC that is..

 

[charrison]

Originally posted by: LunarRay

Originally posted by: SuperTool
Now I am really confused. I make high 5 digits, and I am single, am I getting this credit or not?

No!

The credit for single ends at about 12000

edit.. the EIC that is..

I say drop the EIC and let 2nd jobs be fed tax free. Those working more than 1 job obviously need the break.

 

[LunarRay]

The American dream...

Did you know you can fill out form w5 I think it is and get advanced EIC based on the expectation.. included in your weekly paycheck so you don't have to wait till the following years filing and return..

 

[CADsortaGUY]

Originally posted by: charrison

Originally posted by: LunarRay

Originally posted by: SuperTool
Now I am really confused. I make high 5 digits, and I am single, am I getting this credit or not?

No!

The credit for single ends at about 12000

edit.. the EIC that is..

I say drop the EIC and let 2nd jobs be fed tax free. Those working more than 1 job obviously need the break.

There are problems with that solution but I'd agree in principle to that if it had a graduated scale capped at above $X.xx

CkG

 

[sandorski]

Originally posted by: CADkindaGUY

Originally posted by: Zebo
How does this work CAD? You get free money from the government or just the money you paid in during the year returned back for having kids?

The child tax credit? I'm all for keeping as much of my money as I can until I see the gov't change it's spending habits. Oh, and I paid plenty of income tax, so I'm not in danger of getting "free" money since even after the $800 credit check I'll still pay(net) into the system.

Now back to the topic, one side of me thinks as DealMonkey does but another says that making someone jump through hoops for "free" money isn't going to help solve the problem of some people making money (net) from filing taxes. I think there could be better ways of reducing the tax burden of the "working poor".

Also, my state taxes aren't going to be going up much if any at all.

CkG

Part of the problem is that you didn't really get your money back, your taxes have merely been postponed until the growing debt gets to the point it must be paid off. Todays tax cut is tomorrows tax increase.

 

[CADsortaGUY]

Originally posted by: sandorski

Part of the problem is that you didn't really get your money back, your taxes have merely been postponed until the growing debt gets to the point it must be paid off. Todays tax cut is tomorrows tax increase.

Unless spending is brought under control(ie cut)

CkG

 

[charrison]

Originally posted by: sandorski

Originally posted by: CADkindaGUY

Originally posted by: Zebo
How does this work CAD? You get free money from the government or just the money you paid in during the year returned back for having kids?

The child tax credit? I'm all for keeping as much of my money as I can until I see the gov't change it's spending habits. Oh, and I paid plenty of income tax, so I'm not in danger of getting "free" money since even after the $800 credit check I'll still pay(net) into the system.

Now back to the topic, one side of me thinks as DealMonkey does but another says that making someone jump through hoops for "free" money isn't going to help solve the problem of some people making money (net) from filing taxes. I think there could be better ways of reducing the tax burden of the "working poor".

Also, my state taxes aren't going to be going up much if any at all.

CkG

Part of the problem is that you didn't really get your money back, your taxes have merely been postponed until the growing debt gets to the point it must be paid off. Todays tax cut is tomorrows tax increase.

That is likely not the case when the economy improves.

 

[LunarRay]

How about 0 tax up to 25000 and no tax over 300000 and no credits of anykind and no fica/medicare withheld all the needs come from the 25001 through 300000 $.

 

[sandorski]

Originally posted by: CADkindaGUY
Now, I know alot of you think you know how I feel about taxes and credits (net $0 ) but I'm not sure this is a good way to go about fixing the EIC mis-reporting problem.

IRS to Ask Low-Income Families for Proof

<snip>
low-income earners will be asked to bolster their tax returns with proof that they qualify for a tax credit designed to lift the working poor out of poverty.
</snip>

I think that taking the "free" money away would do more to help this situation than creating a "certification" program to regulate it. Spend money to save money?

CkG

I believe this has always been the way the IRS operated, that being the burden of proof lies with the taxpayer. This was a hue issue back in the 80's when people were losing everything without notification. Many had a terrible time proving their innocence.

 

[CADsortaGUY]

Originally posted by: sandorski

Originally posted by: CADkindaGUY
Now, I know alot of you think you know how I feel about taxes and credits (net $0 ) but I'm not sure this is a good way to go about fixing the EIC mis-reporting problem.

IRS to Ask Low-Income Families for Proof

<snip>
low-income earners will be asked to bolster their tax returns with proof that they qualify for a tax credit designed to lift the working poor out of poverty.
</snip>

I think that taking the "free" money away would do more to help this situation than creating a "certification" program to regulate it. Spend money to save money?

CkG

I believe this has always been the way the IRS operated, that being the burden of proof lies with the taxpayer. This was a hue issue back in the 80's when people were losing everything without notification. Many had a terrible time proving their innocence.

Don't get me wrong - there needs to be checks to make sure people who are claiming the credit actually earned it but a prequalification phase seems a bit much to me. One of the biggest reasons people would falsely file for the credit is because it is refundable - making incometax a net $0 thing would take a huge bite out of it's appeal to cheaters.

CkG