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Who do I thank for all the free money?Follow

#1 Feb 06 2012 at 11:57 AM Rating: Excellent
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So we're a family of four now. About median income, nothing special. Don't own a home or anything like that. About what I imagine an average American family to be like. I was dutifully filling out my taxes this weekend. I got all my paperwork together and got everything submitted. I love e-filing for the record, so much easier than the old days.

The end result?

I'm officially getting paid to live here now. The refund came out to more than I paid this year in taxes. Thanks mainly to the child tax credit. I can't say I was too surprised, I've been expecting this for a while now. Given all the ranting and raving about debt recently, I can't help but feel like I'm driving the getaway car though. For the record I wouldn't mind paying more. I'm not entirely sure I enjoy the feeling of being a freeloader or anything. Still that extra money will eventually be put to good use, hopefully stimulating that housing market at some point.

Anyway this is kind of old news, but I've not been following politics as closely the last month or two. So a question for people who are: is anyone going to change this? You know, the child tax credit, is it going away? I've heard it's due to expire or shrink at some point. You hear a lot in the news about raising or not raising taxes on the rich, but not so much about this little nugget.
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#2 Feb 06 2012 at 12:02 PM Rating: Good
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The Child Tax Credit is currently $1,000 per rugrat. It's that way through 2012 and, if not extended, will revert to $500 per tyke. The premise is that kids are expensive and assisting parents in this way is in the common good since it beats food stamps.
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#3 Feb 06 2012 at 12:08 PM Rating: Excellent
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Well I won't look a gift horse in the mouth or anything. We're not exactly food stamp poor though.
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#4 Feb 06 2012 at 12:53 PM Rating: Excellent
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I was using a bit of hyperbole.

The government figures that you can use the extra money to raise your kids. Also, it's a nice political gesture to appeal to the lower/middle class.
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Wow. Regular ol' Joph fan club in here.
#5 Feb 06 2012 at 1:10 PM Rating: Excellent
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Jophiel wrote:
I was using a bit of hyperbole.


You and your metaphorical stuff. It's all over my head.

Smiley: disappointed
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#6 Feb 06 2012 at 1:36 PM Rating: Good
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Jophiel wrote:
The Child Tax Credit is currently $1,000 per rugrat.


Sort of. But, as with most things IRS, it's a little more complicated.

You can get up to $1,000 per child, but the Child Tax Credit is what's called a "non-refundable credit," which means it's used to lower the amount of tax that you owe. If, lets say, you have four kids, and you owed $2,000 in tax based on your adjusted gross income, then you can only receive $2,000 for the child tax credit. But, of course, it can be even more complicated than that. There's a really fun worksheet starting on page 4 of this publication that helps you determine what you can take.

Of course, then you can go down to where the "refundable credits" are at the bottom of the second page of your 1040 and take what's called the "Additional Child Tax Credit." Usually, that's just what you could take, less what you already took as a "non-refundable credit." But sometimes, it's trickier. There's a really fun worksheet that you have to fill out to see exactly what you can take.

There are also what's called "Phase out amounts" where the child tax credit is concerned. For married taxpayers filing a joint return, the phase-out begins at $110,000. For married taxpayers filing a separate return, it begins at $55,000. For all other taxpayers, the phase-out begins at $75,000.

Leave it to the IRS to make things as absolutely complicated as they possibly can.

ETA: Of course, all that to say, usually it works out to $1,000 per rugrat, as Joph said. But it can be confusing to just assume it's always that amount, and you'll automatically get $6,000 if you have six kids.

Edited, Feb 6th 2012 1:37pm by Belkira
#7 Feb 06 2012 at 1:52 PM Rating: Good
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Belkira wrote:
But, of course, it can be even more complicated than that. There's a really fun worksheet starting on page 4 of this publication that helps you determine what you can take.

There's a really fun worksheet that you have to fill out to see exactly what you can take.

Fun worksheets?

I had always assumed the child tax credit was merely an acknowledgement that kids under 16 are an investment but a liability.

There are pieces of machinery that are eligible for way bigger tax breaks than kids.

Btw, the rugrats fall off the child tax break just as you're sending them off to college. Be sure to look for the tuition tax credit. Smiley: wink
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#8 Feb 06 2012 at 2:13 PM Rating: Good
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Thank Gbaji, I'm sure he'll appreciate it.
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#9 Feb 06 2012 at 2:50 PM Rating: Good
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Technogeek wrote:
Thank Gbaji, I'm sure he'll appreciate it.


Not specifically speaking of the child tax credit itself, but it is problematic when an increasing percentage of the total population in a Democracy either doesn't pay taxes or actually receives more money back (in tax refunds and benefits) than they pay. You end out with an unequal situation where everyone's vote is equal in terms of affecting what government does, but not everyone is equal in terms of paying for what government does. All those in the "paying nothing, or making out" category now have every incentive to vote to have government keep expanding the size and cost of its programs. Why not? They're not paying for it. And in all likelihood they are the biggest recipients of the result.


Everyone should pay some portion of the tax burden. Progressive taxes are fine, but should never become so much so that the "free money" situation occurs.
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#10 Feb 06 2012 at 3:00 PM Rating: Excellent
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Wow. Regular ol' Joph fan club in here.
#11 Feb 06 2012 at 3:22 PM Rating: Good
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I paid basically zero taxes last year and got back a hefty sum and there was no complaint about that.
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#12 Feb 06 2012 at 3:30 PM Rating: Good
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I haven't done mine this year yet, and since I don't have kids, am gainfully employed, and am not a minority I'm sure I'll get screwed once again. Smiley: wink

In truth, I'm debating on how to do my taxes this year. The past 5 or 6 I've been using an accountant, he was a pretty sharp cookie, and kind of a motivator as well. He never charged excessively, and was always real thorough and fast at doing my taxes. He retired and made a referral to some gal in town, but I don't know that I really need this level of service. I'm a home owner, but with no dependents and not having my own business, I'm thinking I should just use turbo tax or one of those to get it done this year.
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#13 Feb 06 2012 at 3:34 PM Rating: Decent
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lolgaxe wrote:
I paid basically zero taxes last year and got back a hefty sum and there was no complaint about that.


Did you post about it here? It's not like this is the first time I've made the point about the danger of having too large a percentage of the population not bearing the costs for the things they vote on.
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#14 Feb 06 2012 at 3:44 PM Rating: Good
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gbaji wrote:
lolgaxe wrote:
I paid basically zero taxes last year and got back a hefty sum and there was no complaint about that.


Did you post about it here? It's not like this is the first time I've made the point about the danger of having too large a percentage of the population not bearing the costs for the things they vote on.


Considering lolgaxe's line of work, I think him laying his life on the line in the military is more than enough reason that his vote should bear up no matter what amount of taxes he's paying.

Of course, that's just according to your fucked up logic. Personally, I feel that it's more than fair that every citizen gets an equal vote, and that their vote doesn't count more if they have more money. But you thinking that the rich should rule the poor doesn't surprise me in the least.

Edited, Feb 6th 2012 3:44pm by Belkira
#15 Feb 06 2012 at 4:08 PM Rating: Excellent
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gbaji wrote:
Technogeek wrote:
Thank Gbaji, I'm sure he'll appreciate it.


Not specifically speaking of the child tax credit itself, but it is problematic when an increasing percentage of the total population in a Democracy either doesn't pay taxes or actually receives more money back (in tax refunds and benefits) than they pay. You end out with an unequal situation where everyone's vote is equal in terms of affecting what government does, but not everyone is equal in terms of paying for what government does. All those in the "paying nothing, or making out" category now have every incentive to vote to have government keep expanding the size and cost of its programs. Why not? They're not paying for it. And in all likelihood they are the biggest recipients of the result.


Everyone should pay some portion of the tax burden. Progressive taxes are fine, but should never become so much so that the "free money" situation occurs.


There will always be a cutoff point where benefits received are greater than benefits paid. Math just doesn't let us do otherwise unless the levels of graft are obscenely high.
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#16 Feb 06 2012 at 4:16 PM Rating: Good
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What Belkira said.
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#17 Feb 06 2012 at 4:20 PM Rating: Default
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idiggory, King of Bards wrote:
What Belkira said.


Doesn't lolgaxe live and work in NY? That's not exactly a war zone. Not everyone who is employed by the military is putting their life on the line, you know. Also, child tax credits should be a percentage of tax paid, not a fixed amount. That would solve the whole "getting back more than you paid in" dilemma.

If you don't tax a fixed amount, you shouldn't credit a fixed amount. Kinda simple.
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You guys keep tossing facts out there like they mean something.


#18 Feb 06 2012 at 4:28 PM Rating: Good
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All I know is that we missed out on an extra grand because Jacob's due date was wrong.
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#19 Feb 06 2012 at 4:34 PM Rating: Excellent
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BrownDuck wrote:
Doesn't lolgaxe live and work in NY?
This year, yeah. Last year no.

Anyway, I wasn't singling gbaji out. No one complains that we're paid with tax dollars, don't pay tax on it, and still get extra when we file taxes on that money when deployed. At least I find that situation kind of ridiculous. Not just soldiers, either. The private contractors over there make six figures easy, and get pretty much the same treatment.

Edited, Feb 6th 2012 5:34pm by lolgaxe
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#20 Feb 06 2012 at 4:49 PM Rating: Good
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BrownDuck wrote:
idiggory, King of Bards wrote:
What Belkira said.


Doesn't lolgaxe live and work in NY? That's not exactly a war zone. Not everyone who is employed by the military is putting their life on the line, you know. Also, child tax credits should be a percentage of tax paid, not a fixed amount. That would solve the whole "getting back more than you paid in" dilemma.

If you don't tax a fixed amount, you shouldn't credit a fixed amount. Kinda simple.


Personally, I don't think it's really a "dilemma." And in some cases, like the EIC, for example, the point was almost to give people more money back than they paid in.
#21 Feb 06 2012 at 4:59 PM Rating: Decent
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Belkira wrote:
Personally, I don't think it's really a "dilemma." And in some cases, like the EIC, for example, the point was almost to give people more money back than they paid in.

I don't really have a horse in this race either way, but it would make more sense to me that if we want to give money to targeted groups, we establish a way to do so outside of the tax system. I'm not sure why tax refunds became the de facto way to do this.
#22 Feb 06 2012 at 5:09 PM Rating: Excellent
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Majivo wrote:
Belkira wrote:
Personally, I don't think it's really a "dilemma." And in some cases, like the EIC, for example, the point was almost to give people more money back than they paid in.

I don't really have a horse in this race either way, but it would make more sense to me that if we want to give money to targeted groups, we establish a way to do so outside of the tax system. I'm not sure why tax refunds became the de facto way to do this.


Why do you want to add more cost to the system for no gain?
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#23 Feb 06 2012 at 5:18 PM Rating: Excellent
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Debalic wrote:
All I know is that we missed out on an extra grand because Jacob's due date was wrong.

You won't be crying when he's 17.
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Wow. Regular ol' Joph fan club in here.
#24 Feb 06 2012 at 5:21 PM Rating: Good
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Majivo wrote:
Belkira wrote:
Personally, I don't think it's really a "dilemma." And in some cases, like the EIC, for example, the point was almost to give people more money back than they paid in.

I don't really have a horse in this race either way, but it would make more sense to me that if we want to give money to targeted groups, we establish a way to do so outside of the tax system. I'm not sure why tax refunds became the de facto way to do this.
We do both. Dependents are a $2k income deduction and families with a combined income under a certain threshold receive monthly cheques, decreasing the closer you are to the cap. THEN, there's another monthly cheque that all families receive of $100/child under some magically deduced age, but you have to count that in your income come tax time.
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#25 Feb 06 2012 at 5:29 PM Rating: Good
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Finishing up our taxes tonight (hopefully) but man oh man, I miss those rugrat credits. And Ray won't accept my argument that it makes tax-sense for us to have another kiddo.Smiley: frown
#26 Feb 06 2012 at 5:54 PM Rating: Decent
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lolgaxe wrote:
Not just soldiers, either. The private contractors over there make six figures easy, and get pretty much the same treatment.

Speaking of which, anyone seen Totem lately?
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we all know liberals are well adjusted american citizens who only want what's best for society. While conservatives are evil money grubbing scum who only want to sh*t on the little man and rob the world of its resources.
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