title>Tax Guru-Ker$tetter Letter Wizard Animation

                 

Tax Guru-Ker$tetter Letter
Friday, May 18, 2007
 
Profiting from tax returns?


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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