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Posted by Herb Smith on March 3, 2007, 5:07 am
Please log in for more thread options ttt...@yahoo.com wrote:
> Is it possible to have the IRS "refund" us about $2700 in
> Tax money when we file our 2006 tax? =A0TOTAL income $11000
> from Husband and wife with 2 kids (1 seven years old and 1
> one year old).
>
> The $11000 is from my "independent contractor" job in which
> I HAVE NOT PAY A PENNY TO THE IRS IN INCOME TAX THRU-OUT
> 2006. =A0We paid the CPA $200 to file this TAX return. =A0Was
> this a rip-off from the CPA? CPA verbally gauranteed the
> "REFUND" and stated that he would refund us the $200 fee if
> the IRS does not pay.
>
> We will be ultimately responsible for any ERROR on our tax
> return and NOT the CPA!
>
> My thinking...How can we get tax money "BACK" when we HAVE
> NOT pay any taxes at all? =A0The IRS is an institution that
> "COLLECT" taxes and IS NOT an institution that give or
> provide "MONEY" to people with LOW, very LOW
> income...perhaps below poverty! =A0Is this true?
No, that is not true.
You have apparently not heard about the Earned Income Credit
(EITC), which will give you a refund (or reduce your taxes)
even if you had nothing withheld. It is targeted for low and
moderate income families, such as yours. It is discussed in
your 1040 instruction booklet, or in much more detail in IRS
Pub 596. Or, you can just ask your CPA to explain it to you
(after all, you paid him for this return!).
However, based on the AGI figure you gave ($11,000 net
income) and your family size (married, 2 children), your
refund/credit should be about $4,400 this year. If your CPA
erred, he seems to have forgotten one child! Definitely a
reason to contact him. Maybe he doesn't know about the baby.
I'm surprised that you have not been aware of this Credit,
as it has been around for many years. You might want to
check your tax returns from 2004 and 2005 to make sure that
you received this benefit (older returns are now closed for
additional refunds). If the credit does not show on these
returns then you should be filing amended returns for those
two years (assuming you meet all the qualifications).
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