Many people seem to be under the misconception that lazy people will receive a huge tax refund, or that people who receive a huge tax refund are probably lazy. I’ve even seen people say, “People who live entirely off welfare get huge refunds and here I am paying taxes…” Um. No. Let me school you guys on taxes, forgive the snark. I’m replying to a lot of stupid comments at once here.
I have managed tax offices and volunteered with VITA. In the tax business, we see two major types of taxes. The first half of the season is usually swarmed with easy tax forms of people expecting a refund. The second half is usually swarmed with complex tax forms (like farm income or a lot of investment income–love it when you sell a stock, really I do) and people who owe the IRS.
When you fill out the 1040, you are not paying taxes. You are reconciling taxes.
You pay taxes all year. If you have a job, they take money out for federal income tax, social security, and medicare. If you make income otherwise, sometimes the people paying you will take out money for your taxes, and sometimes they don’t; however, it usually is beneficial if you are making a lot of money where taxes are not being taken out, that you pay taxes throughout the year. You can send the IRS money any time. They love taking your money. Most corporations and businesses do such things. At the end of the tax year, you gather all your income and you figure out what you owed in taxes, and then you reconcile the difference.
There is no way someone solely living off welfare can receive a refund.
Huge refunds are generally a result of two things:
1. Overpayment of taxes
2. EIC (Earned Income Credit)
Both of those require one to work.
For overpayment of taxes, one not only has to work, but also pay out in taxes. Usually what happens is once you figure out all the adjustments to income and tax credits, someone gets back a lot more than they paid out, but they are still actually paying taxes.
Joe paid out 10 grand in taxes, and found out he only owed a grand. Joe gets a $9,000 refund.
Sue owns her own business and didn’t pay out much during the tax year for taxes. After figuring her taxes, she discovered her tax liability was $1,000. She writes the IRS a check for a thousand dollars.
Joe and Sue both paid the same amount in taxes, but Sue believes Joe didn’t pay any taxes because he got a refund and she paid taxes because she didn’t. Sue is an idiot. Sue is also usually a snob. Really, Joe basically used the IRS as an interest-free savings, and a lot of times, Joe will change his W-4 increasing dependents and actually start putting a little aside in an interest-bearing savings because some Joe’s like to make money.
Refundable credits are the only real free money the government gives via taxes.
Earned Income Credit is a different thing. Let’s first explain the 1040.
The 1040 can be summed up into the following equations:
Income – Adjustments to Income – standard/itemized deduction – exemptions = Taxable Income
Taxable Income on IRS Chart gives you the Tax.
Tax minus Non-refundable credits = new tax, and it stops at zero. You can’t have a negative tax yet.
New Tax – refundable credits = tax you owe (now this can be a negative number)
Tax you owe – money you already paid = Refund/Payment
It’s confusing, but I think it’s easy because I broke it down like this. Anyway, the EIC is a refundable credit, meaning you can get into the negative, and it’s usually the largest of all the refundable credits with the additional child tax credit coming in second.
Some people think people solely on welfare collect the EIC, but they can’t. In order to claim the EIC, you have to have earned income from a job. Government money is not considered an income. Some people on welfare do earn an income, but they don’t get the EIC based on the welfare they collected. It is solely based on the income they earned.
Another place government money comes up in taxes is claiming dependents and head of household. One of the factors in determining such things is how much money did one contribute to the children (with whoever contributing more being the winner). Any money received from the government used toward the children is considered to be contributed by the government, not the person who signed up for the services.
Illegal immigrants are not getting free money from us.
In addition, to claim the EIC, you have to have valid social security numbers. You have to be a US Citizen.
So who is getting the free money from the government?
Now let’s take a look at the EIC. It’s a curve. You get more if you earned more up to a certain point, and then the more you earned, the less you get.
The peak is mainly at people who make $14,000 – $17,500 a year. 3 kids will get you back 6 grand. No kids, you get about 500 married filing jointly and 70 otherwise.
If you work 40 hours a week at minimum wage, you would make before taxes, $15,080. Price tag for the American Dream is $130K a year. It’s impossible to live off of 15 grand a year with 3 kids. The EIC levels the playing field just slightly by bringing it up to $20 grand a year. In comparison to the $130K it takes to really live in America… these people are NOT abusing the system. The system is abusing them.
I’m sorry, but a person who works 40 hours a week all year doesn’t deserve to be in poverty status. There is something wrong. Either they aren’t making enough per hour, or the cost of living is too high. Who determines both their wages and the cost for them to live? The corporations. And who is paying to fix the inequality in that realm? The government.
The real welfare mongrels are the corporations.
It is the CEO’s and corporate executives getting bail outs for underpaying their employees and jacking up the prices while sitting in exorbitant mansions and yachts flying by helicopter for take-out who are the lazy entitled looking for a free ride. They want America to be their customer, yet they outsource all their labor.
I’m a lazy bitch. I know who the lazy people are. I can recognize my own. I’m what you call an expert on laziness. Rich people are lazy motherfuckers. Poor people are usually your slave labor work horses. Don’t believe me? Ask a rich person to clean your toilet for you and ask a poor person to do the same. You’re welcome.
Really. If you think poor people are poor because they are lazy, you are the one being lazy on the thinking.
In another note, if a man steals your TV, he steals. But we don’t flip out if someone comes in your house to steal bread. Our compassion kicks in. They need to eat to survive. If someone is so desperate to steal bread to survive, I mean, that’s when our hearts open up and give them the bread. Anyone who takes less than $20,000 a year from the government from taxes to welfare is stealing bread. That’s all. It’s not your TV. It’s not diamonds. It’s their bread. It’s the basic necessities to survive and nothing more. I don’t care if they have an iphone. I don’t care if they buy steaks with their food stamps. 20 grand a year is not much in comparison to what corporations take from the government in the form of bail-outs, loop holes, overseas investing, money laundering, lay-offs (unemployment), shitty wages… They are the ones coming into your house to take your TV. Don’t be a sucker. Quit blaming poor people for your sense of unfairness.
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