Profiting from tax returns?
Posted by taxguru on May 18, 2007
Q:
Subject: a tax refund isn’t a profit
Hi Kerry,
In regards to the cartoon with the subtitle “A tax refund isn’t a profit…”, couldn’t it be argued that a tax refund is in fact a profit for those who qualify for the EIC?
Keep up the great work on the site!
Thanks,
A:
That is an excellent point. While I was obviously echoing the cartoonist’s point that recovering taxes you had paid in during the previous year isn’t a net profit; the EIC welfare program does allow many people to receive thousands of dollars more than they originally paid in.
Referring to the EIC as a profit from a tax return is actually a valid description, as anyone will understand who has finessed Schedule C expenses. Often, going light on expenses results in a much higher net refund on the 1040 because of the ridiculous way by which EIC is calculated.
Thanks for writing and pointing that out.
Kerry
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