Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 03-26-2008, 06:34 PM
Junior Member
 
Join Date: Mar 2008
Posts: 1
Why do some people get a bigger refund than others?

Why do some people get a bigger refund than others



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 05-18-2008, 02:34 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,399
Blog Entries: 3
Why do some people get a bigger refund than others?

Its really simple. There are basically 2 reasons why some people get a bigger refund than others.

1. For Taxpayers with W-2's
In this situation, these taxpayers have simply overpaid in their federal withholding. In other words, they did not claim their full allowable dependent exemptions on their W-4, and had their employers withhold more federal taxes than required. Thus, come tax time, they would file their tax returns and receive a much bigger tax refunds than expected.

Additionally, these taxpayers may be entitled to the earned income tax credit, additional child tax credit and other tax credits. All of these tax credits could result in a higher tax refund than would normally be expected.

2. For Self-Employed Taxpayers.
In this situation, these taxpayers who have their own business are required to to make 4 estimated tax payments throughout the year. Sometimes, the taxpayers businesses yield a reduced taxable income and hence a reduced tax liability and so the estimated tax payments could considerably exceed the actual tax liability.

Thus, the taxpayer in this case would get a considerable tax refund. However, it is quite common for taxpayers with a business not to claim all the tax refund, instead electing to have the refund applied to the following years estimated tax payments.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning