Yes you're right. My bad.

If a parent earns 43K with 4 dependents and claimed them, are you saying that he/she has zero federal tax liability? I'm asking, because I don't know.

Footwedge wrote: If a parent earns 43K with 4 dependents and claimed them, are you saying that he/she has zero federal tax liability? I'm asking, because I don't know.

Yeah. So if you put 4 on your W4 (yourself plus your kids, remember you can always claim yourself) they are still going to withold over $2k. Then you would have 0 tax liability, then get the ETIC. So you would get all that back. It's pretty crazy how it works out.

People are pretty naive though. There is an itemized W4 that you can fill out that keeps your excess withholding at 0. So the people getting the max should only be getting checks for $3831 because of adance EITC payments their employer should be making to them (hell it's a write-off, why not?!)

LJ wrote:

Footwedge wrote: If a parent earns 43K with 4 dependents and claimed them, are you saying that he/she has zero federal tax liability? I'm asking, because I don't know.

Yeah. So if you put 4 on your W4 (yourself plus your kids, remember you can always claim yourself) they are still going to withold over $2k. Then you would have 0 tax liability, then get the ETIC. So you would get all that back. It's pretty crazy how it works out.

Well, I just did a crude run through...and not scientific at all. But if a head of a household pulls down 40K with 5 dependents, (claiming him/her self) then he/she gets the standard deduction of $3650 per dependent. Multiplying 5 by 3650, it reduces her number down to appx. 20,000. At that number, he/she is still responsible for $2500 in federal taxes. And, there is no deduction for her 7.6 in payroll taxes.

I understand that there might be some additional deductions, but the standard deduction is the main deduction.

With that said, if a worker has more than 4 kids, he/she can divide iot down further..which is different than the EITC which is limited to 4.

The CTC reduces your tax liability by $1000 per child. You may also be able to claim this, which could increase your refund even more. It's a pain to calculate so I am not going to for a discussion.

http://www.irs.gov/individuals/page/0,,id=14806,00.html

If you make 40k and have 3 kids you aren't going to have any tax liability.

BTW, head of household standard deduction is over $8000.


Single or married filing separately — $5,700

Married filing jointly or Qualifying widow(er) — $11,400

Head of household — $8,350

The best I could get in screwing around on my handy dandy $1800 tax prep program (such suckers we are) was $9800 return for a head of household making 35,000 with 4 kids. All her tax money back plus a combo of EITC and Additional CTC without adding any daycare credit or anything else to it.

The big issue is government is way too big and even though a lot of people are paying a lot of taxes, we are still borrowing tons of money. Until we cut government back to doing just the basics in the Constitution and charge user fees for the rest then we aren't going to get anywhere. Once we do this, I'd be in favor of cuts to all income levels and let anyone under 30k pay no tax with a small tax from 30-45k. This will create economic activity and hopefully we can start growing wages again and then let these poorer folks pay a nominal tax so they have something in the system. It's going to have to be a tiered process so we don't crush the poorer people.

Footwedge, I never gave a breakdown of why someone was gettng that large of a refund, since I wouldn't have access to that information, I just gave the dolllar amounts of the checks we were cashing.

"They were referencing EITC. "

Yes that was part of it, I also mentioned there were other programs. I also mentioned that I didn't see the specific return, just the first page that had her 'income'. I don't know why you are still misrepresenting my posts, especially when it is fairly easy to go back and read them. Back to the point, getting back $$$ from the government is not new, or even up for debate, it happens....regularly. I only made that point repeatedly, yet for some reason this point is ignored because the exact amount returned is apparently more important.

And I agree with the OP that it is an issue when people with no "skin in the game" have so much power over those that do.

Footwedge wrote: If a parent earns 43K with 4 dependents and claimed them, are you saying that he/she has zero federal tax liability? I'm asking, because I don't know.

Yup, zero tax liability. I've been there (3 kids, and got laid off halfway through the year so I just barely qualified for EITC).

I got every dime back plus more that year.

jmog wrote:

Footwedge wrote: If a parent earns 43K with 4 dependents and claimed them, are you saying that he/she has zero federal tax liability? I'm asking, because I don't know.

Yup, zero tax liability. I've been there (3 kids, and got laid off halfway through the year so I just barely qualified for EITC).

I got every dime back plus more that year.

Maybe you should have followed Sleeper into the business world and MADE BIG CASH MONEY $$$$$$ LOL

Footwedge wrote:

jmog wrote:

Footwedge wrote: If a parent earns 43K with 4 dependents and claimed them, are you saying that he/she has zero federal tax liability? I'm asking, because I don't know.

Yup, zero tax liability. I've been there (3 kids, and got laid off halfway through the year so I just barely qualified for EITC).

I got every dime back plus more that year.

Maybe you should have followed Sleeper into the business world and MADE BIG CASH MONEY $$$$$$ LOL

lol, the kid is still in college making $8/hr and McDonalds, I think I'll stick where i'm at .

FYI, my one layoff was back in 2003 after the 9/11 recession. It was the best thing that happened to me because I hated that company and I went back to get my masters in the process. Been working in R&D ever since .