Why do we only get back $1,000 for a child on our tax refund ?
I'm appreciative and grateful that we get something because we could get nothing. I just wonderingvthat $1000 it takes more than $1,000 to raise a child in a year. I am not saying we should get back $10,000 think at least $5000.
@ danxp: I make $35000 a year after taxes as a single parent.
- Casey YLv 71 month ago
Its just supposed to be a little help.
Considering your federal income tax should only be in the $2500 range anyway...where would that other $2500 come from? You do realize there are different taxes paid and this only applies to Federal Income tax...not social security or medicare...
- Coffee DrinkerLv 71 month ago
The tax credits for having a child are not intended to pay for you to raise your child. You are expected to pay for raising your own child. The tax credits just make it a little bit cheaper by reducing your tax burden.
If you did not have a child and were simply single with $35k income, you'd pay just over $2500 in federal income tax.
With a child (assumed they were under 17 years old), claiming head of household status, earned income credit, and child tax credit you get about $1200 refund without having any money withheld.
So you swing from paying $2500 to getting $1200 so your child is really worth about $3700 in terms of tax savings.
Look at it this way - you could adjust your W4 and have your employer withhold tax as though you were single with no children. If done correctly they'd withhold a little over $200/ month for a total of $2500 by the end of the year. Then when you file you'd get about $3700 back, whereas someone with the same income and same withholding but no child would simply break even and not get a tax refund. I don't recommend that because you'd be giving the IRS an interest free loan all year, but
No matter how you look at it, you're getting $3700 worth of net value from the tax perks to help you pay for your child. Not quite the $5,000 you say you think you should get, but not too far off.
If you want to confirm this, and you're filing with tax software, just save your return, then go back and delete your child from the dependent's section. The software will recalculate your entire return and will probably swing from a ~ $1200 refund to owing ~ $2500 which is where'd you'd stand without the tax benefits you get for your child. Of course don't save your return, just do this for illustration.
- 1 month ago
The idea is not to give you enough money to raise your child. The idea is to credit you for the fact you have one (or two or three) with the understanding that we need humans added to the population and kids are expensive.
- Max HooplaLv 71 month ago
It's a tax credit. It's not meant for the government to pay all your child rearing costs.
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- Anonymous1 month ago
That's all they're worth