Tax Guru-Ker$tetter Letter

Friday, May 18, 2007

Profiting from tax returns?

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,

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

Labels: EIC

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 5/18/2007 10:35:00 AM Send this post: