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Posted: 2/5/2002 11:02:42 AM EDT
I have a friend who just did his taxes, and he said that because of the $300 rebate we got this year, he lost that much of his refund.... i.e. he had to deduct $300 from what he would have gotten back??? Does this sound right? I thought that was a tax relief "rebate" we all got from the 2000 tax year, not simply an advance? So, if I normall break even, now I am going to have to PAY $300? Please tell me this is not right???
Link Posted: 2/5/2002 11:08:33 AM EDT
hope not. because i dont remember what mine was.
Link Posted: 2/5/2002 11:17:50 AM EDT
[Last Edit: 2/5/2002 11:28:59 AM EDT by Philadelphia_GunMan]
The tax rebate was a $300 advance on what you would get back on 2001's taxes. In other words if you normally get back about $500 and you got your $300 check back in August, then you are only gonna get back $200 now. The law didn't even pass until half way into 2001 so really its pretty good that it was made retroactive to Jan 1 2001. Falarak - If you normally break even then you would get the $300 rebate check and then still break even when you file your return this year.
Link Posted: 2/5/2002 11:18:20 AM EDT
I belive you have to add the $300 as income. You don't deduct it out of your refund. Check with a CPA or your tax service first though... Av.
Link Posted: 2/5/2002 11:18:56 AM EDT
You assumed it came out of 2000 because it was being held up as a rebate. Instead, it was RELIEF from the current tax year. If your friend waits expectantly for that big rebate at the end of the year then he/she is doing his/her taxes all wrong anyway. Ideally you should have little to no return at the end of the year, and certainly not want to owe. I would rather have my money as I earn it. Not give them more than needed through the year and get excited about getting it back after they have used it for 12 months. You really should pay closer attention. I have lost count of the people that have been totally surprised by this fact. A fact that I and others who pay attention knew last year before the 1st check was cut. -elliott I hope everyone didn't blow that FREE MONEY! [:)]
Link Posted: 2/5/2002 11:18:59 AM EDT
[Last Edit: 2/5/2002 11:21:08 AM EDT by Profet_Mohammed]
[left]My wife does taxes she had schooling in taxes!nope the IRS just want to now what you get on your rebate you wont get deducted! so your safe. so if you owe its from something else.[/left]
Link Posted: 2/5/2002 11:23:18 AM EDT
[Last Edit: 2/5/2002 11:24:04 AM EDT by lordtrader]
Why would he need to do that???? It is a tax rebate therefore it is not a reportable income. Simply put; do you add you previous years refund to your annual gross income? I think not. Me thinks your friend did his taxes wrong. But then again I am not a tax professional, so I could just be talking out my ass here.
Link Posted: 2/5/2002 11:26:03 AM EDT
Elliott - right on man I have always set my taxes so I break even or get like $100 back. I'm always amazed at people who get all excited at their tax returns - they are all giving the government interest free loans.
Link Posted: 2/5/2002 11:27:43 AM EDT
The Tax refund has NO impact to this years refund. You do not deduct 300 from your return, nor is it income for the year 2001 because it is a refund of 2000 taxes, which you were paying during the year 2000.
Link Posted: 2/5/2002 12:06:50 PM EDT
Does anyone use TurboTax? The current edition asks how much you received in the rebate. The default value is $300. If you use this software, try varying the rebate amount and see what effect that has on your refund.
Link Posted: 2/5/2002 12:11:59 PM EDT
Ok, I got a little more info on this from the IRS.GOV site. The rebate was a "tax rate reduction" releif that is given to everyone. (just about everyone) It normally would come to us on our 2001 taxes. However, Bush wanted instant relief, so we got an advance on this. For those who for some reason did not receive theirs, they get theirs at the end of the year. Therefore, if you leave this off Turbotax, it will "appear" that you are getting more back, because you either get it in advance, or when you do your taxes. It should not, to my understanding right now, affect your normal tax situation.... or affect your refund negatively in any way.
Link Posted: 2/5/2002 12:12:50 PM EDT
I used turbo tax last year, but havent got around to this year yet, what did you get when you compared?
Link Posted: 2/5/2002 12:22:10 PM EDT
[Last Edit: 2/5/2002 12:24:49 PM EDT by Nojazz]
Originally Posted By elliott: You assumed it came out of 2000 because it was being held up as a rebate. Instead, it was RELIEF from the current tax year. If your friend waits expectantly for that big rebate at the end of the year then he/she is doing his/her taxes all wrong anyway. Ideally you should have little to no return at the end of the year, and certainly not want to owe. I would rather have my money as I earn it. Not give them more than needed through the year and get excited about getting it back after they have used it for 12 months. You really should pay closer attention. I have lost count of the people that have been totally surprised by this fact. A fact that I and others who pay attention knew last year before the 1st check was cut. -elliott I hope everyone didn't blow that FREE MONEY! [:)]
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Right On!!! Why do you want the Gov't holding your money when you could take it yourself? My accountant saw that i was over paying for the first three quarters last fiscal year - he made me change to claim 12 for the last quarter. Now he's doing my taxes and i'm not going to have to pay nor will i get much back - that's the way it is - you get YOUR money through out the year - NOT the Gov't
Link Posted: 2/5/2002 12:47:19 PM EDT
As a general rule, your rebate check will be equal to five percent of the first $12,000 of "taxable income" minus that which is excluded from but not limited to that which you claim under your Schedule B (Form 1045). You can use Schedule B (Form 1045) to figure your modified taxable income for carryback years and your carryover from each of those years, however, do not use Schedule B for a carryforward year, i.e. if your 2001 return includes an NOL deduction from an NOL year before 2001 that reduced your taxable income to zero (to less than zero, if an estate or trust), see NOL Carryover From 2001 to 2002, later. on a joint return, $10,000 for heads of household and $6,000 for singles. Taxable income is the amount after your deductions and personal exemptions stated on look at Form 1040 line 39, 1040A line 25, 1040EZ line 6, or line K on the TeleFile Tax Record, however, if your taxable income is less than $100,000, you do not compute the tax yourself, rather, the math has been done for you in the Tax Table that is included in the instructions to the tax form. Claimants refer to the Tax Table unless one or more of the following is true.1.Your taxable income is $100,000 or more. In that case, use Tax Rate Schedule X. 2.You are required to use Form 8615, Schedule D (Form 1040), or the Capital Gain Tax Worksheet (in the Form 1040 instructions) but only if you do not claim exemption from Foreign Tax Credit whereby you will not be subject to this limit and will be able to claim the credit without using Form 1116 (PDF) if the following requirements are met. 1.Your only foreign source gross income for the tax year is passive income. Passive income is defined later under Separate Limit Income. However, for purposes of this rule, high taxed income and export financing interest are also passive income. Passive income also includes income that would be passive except that it is also described in another income category 2.Your qualified foreign taxes for the tax year are not more than $300 ($600 if filing a joint return) 3.All of your gross foreign income and the foreign taxes are reported to you on a payee statement (such as a Form 1099-DIV or 1099-INT) Your foreign tax credit cannot be more than your total U.S. tax liability (line 40, Form 1040) multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources. To determine the limit, you must separate your foreign source income into categories, as discussed under Separate Limit Income. The limit treats all foreign income and expenses in each separate category as a single unit and limits the credit to the U.S. income tax on the taxable income in that category from all sources outside the United States. Hope this clears it up. [:D]
Link Posted: 2/5/2002 2:31:37 PM EDT
WRONG. WRONG. WRONG. The tax refund you received was for overpayment of year 2000 taxes. It is not calculated as income for 2001 any more than a regular rebate check would be. IT'S SO SIMPLE. DON'T OVERANALYZE IT. It's your money. You gave too much to the govt, in 2000. They gave it back in 2001. PERIOD. That's it !
Link Posted: 2/5/2002 7:07:20 PM EDT
Originally Posted By elliott: You assumed it came out of 2000 because it was being held up as a rebate. Instead, it was RELIEF from the current tax year. If your friend waits expectantly for that big rebate at the end of the year then he/she is doing his/her taxes all wrong anyway. Ideally you should have little to no return at the end of the year, and certainly not want to owe. I would rather have my money as I earn it. Not give them more than needed through the year and get excited about getting it back after they have used it for 12 months. You really should pay closer attention. I have lost count of the people that have been totally surprised by this fact. A fact that I and others who pay attention knew last year before the 1st check was cut. -elliott I hope everyone didn't blow that FREE MONEY! [:)]
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OK, I get the part about not wanting a refund. But what is wrong with "owing" the IRS money at the end of the year?
Link Posted: 2/5/2002 7:19:35 PM EDT
Francisco, I'll give you a point for owing at the end of the year. That is a personal preference. There is a good argument out there that you could take my system of not overpaying during the year to the other extreme and totally underpay all year while earning interest on those funds until it is time to pay up. However my tax-profile is so small that managing such a scheme would negate the benefit. [:)] 223 buckaroo, Please quit believing everything Dan Rather tells you. It makes the rest of us look bad. -elliott
Link Posted: 2/5/2002 7:41:45 PM EDT
Originally Posted By 223-Buckaroo: WRONG. WRONG. WRONG. The tax refund you received was for overpayment of year 2000 taxes. It is not calculated as income for 2001 any more than a regular rebate check would be. IT'S SO SIMPLE. DON'T OVERANALYZE IT. It's your money. You gave too much to the govt, in 2000. They gave it back in 2001. PERIOD. That's it !
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You are correct. The tax rebate for the year 2000 will not affect your 2001 tax liablity in any fashion.
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