Law School Discussion

Income Tax Return

yiplong

  • ****
  • 1477
    • View Profile
Income Tax Return
« on: March 13, 2006, 07:05:15 PM »
I filed my NY State income tax, my refund calculated by TaxCut 2005 is $195, but my total tax withheld is like $50.  How is it possible that I got back from the government more than I paid?

Re: Income Tax Return
« Reply #1 on: March 23, 2006, 01:43:29 PM »
Perhaps you entered some data incorrectly, or perhaps you qualify for some tax credits.  I am unfamiliar with NY, but I know many states give tax credits that result in a refund of more than you paid.  They call it a tax refund although it is just redistribution of income.  Other states give you credit for property tax and other things.  I think I saw a statistic that as far as the federal income tax goes, the average rate for the bottom 20% of taxpayers is *negative*. 

Re: Income Tax Return
« Reply #2 on: March 28, 2006, 03:17:01 PM »
I don't know NY tax system.  I know it is possible for the Federal Tax system.  Due to the deductions and tax forgiveness they give you for kids, it is quite possible for the Federal Tax system to pay you money if your salary is low enough.

yiplong

  • ****
  • 1477
    • View Profile
Re: Income Tax Return
« Reply #3 on: March 29, 2006, 09:03:19 PM »
 ;D Yeah, I got that worked out, looks like I will be getting paid by Uncle Same, how nice!  ;D

Typhoon Longwang

  • ****
  • 719
  • I have the power to stop an LSAT!
    • View Profile
Re: Income Tax Return
« Reply #4 on: March 30, 2006, 12:17:34 AM »
Earned Income Tax Credit may seem like fun but A). I think you have to be over 25 to qualify so be careful and B). people who claim EITC are disproportionately audited...something you might want to avoid while in law school.  Figure out if the benefits outweigh the potential disadvantages.

yiplong

  • ****
  • 1477
    • View Profile
Re: Income Tax Return
« Reply #5 on: March 30, 2006, 02:22:33 PM »
I don't know about tax law, I simply fill out my tax form using this program called Turbo Tax and that is what the program tell me I shall expect to be paid.   ;D

Typhoon Longwang

  • ****
  • 719
  • I have the power to stop an LSAT!
    • View Profile
Re: Income Tax Return
« Reply #6 on: March 30, 2006, 02:29:40 PM »
Fortunately accessing tax related information is ridiculously simple.

http://www.irs.gov/individuals/article/0,,id=96466,00.html

http://www.irs.gov/individuals/article/0,,id=150513,00.html

I just do my taxes by hand so I'm not sure what happens if Turbo Tax makes a mistake, you get audited, and then get fined.  If I was using the software I want to know what they do for you (handle the audit, pay fines, or if they just let you tough out any problems).

yiplong

  • ****
  • 1477
    • View Profile
Re: Income Tax Return
« Reply #7 on: March 31, 2006, 10:04:44 AM »
Oh yes, I downloaded the forms from NYS Tax dept and took a look, Turbo Tax did it correctly.  Then again, I am no expert in tax, I might make the same mistake as the program.  But this refund is only for $200, and Turbo Tax should be liable for making such mistakes.