Can federal and state tax refunds be more than I paid in?

Forgive mе іf thіѕ sounds Ɩіkе a stupid qυеѕtіοn bυt:

1) CουƖԁ mу federal аnԁ state tax refunds bе greater thаn thе amount I paid іn?

2) Doing mу taxes (prelimnary) I аm taking ѕοmе deductions аnԁ amount іѕ growing far past mу total taxes paid fοr thе year.

Thanks.
-I hаνе οnƖу one child (thіѕ year)
-I hаνе earned income (Job) plus аn income property
-Sοmе stock trades…whісh I lost money anyway

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This entry was posted on Tuesday, March 9th, 2010 at 1:02 pm and is filed under Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

10 Responses to “Can federal and state tax refunds be more than I paid in?”

Wayne Z March 9th, 2010 at 1:39 pm

Yes, if you qualify for the “Earned Income Credit” and/or the “Additional Child Tax Credit”.

If not, you did something wrong.

Robin March 9th, 2010 at 2:30 pm

The answer to every tax question: it depends.
Most deductions can not be taken over the amount actually owed. You will have to go to zero. However, there are several “refundable credits”, such as the Earned Income Credit, that you can receive back even if you are already getting back everything you paid. Read your instructions very carefully and, if the amount of the refund looks extreme, check http://www.irs.gov to find a free tax clinic near you to help you out.

rishathra7 March 9th, 2010 at 2:42 pm

It’s possible, it all depends on how much was taken out of each paycheck. If they took out a normal amount and with a kid I’d guess you’ll be fine though.

maria fkun March 9th, 2010 at 3:32 pm

They give back to you what you paid in excess i assume.

Doc. justasinner111 March 9th, 2010 at 3:52 pm

Yes. earned income credit made by Clinton helps families who did not earn much.

paducah_billy March 9th, 2010 at 4:24 pm

Yes, your earned income credit will often boost low wage earners refunds above the amount they paid in. Its a good think for working working couples who dont make a lot of money starting out. I would think you would just use the standard deduction, but I am not looking at your taxes.

What ever you do, dont go and get an instant refund. File and wait, you will pay dearly for the instant refund. Its your money just wait a couple days.

And Clinton DID NOT create the Earned Income Credit. I had it when I was in the Air Force many years ago. Before Clinton,

waggy_33 March 9th, 2010 at 4:58 pm

Your federal refund could be if you qualify for the earned income credit. This credit is refundable.

tkquestion March 9th, 2010 at 5:01 pm

It is possible, but unlikely.

I believe, for this year, sales tax or state tax is allowed as a deduction. If you picked sales tax, it is possible that you may get larger return than federal + state tax.

But… tax is based on your adjusted income. All the deduction you can claim will almost never add up to more than your initial income. If you are getting more returned than paid, that means you have negative income.

Since you said your return is FAR PAST the total taxed paid, I am guessing you have an error or two some where.

Celeste March 9th, 2010 at 5:40 pm

Sure. Your federal refund can be greater by claiming EIC and the child tax & the additional child tax credit. Depending of course on other factors, you could be looking at a few hundred dollars more to a couple of thousand.
Your state can also be more than you paid in. Your state may allow extra credit for Food/Sales tax. Which can also lead to another couple of hundred.
If you rent, you may also qualify for the Homestead Refund. Which is filed seperately from your state return.

My federal refund should be about 3 X’s what I paid in. And the state refund should be about 2 x’s. (Roughly)

Taxes are tricky but if you do them as accurately as possible, it’s not at all impossible to see a greater return.

Judy March 9th, 2010 at 6:07 pm

It’s not a stupid question at all, and sometimes the answer is even yes.

It doesn’t matter how much you have in itemized deductions. They can only take your taxable income, and therefore your tax, to zero.

There is something called a refundable credit, which means you can actually get back more than you paid in. The most common of these is the Earned Income Credit. People with one child can be eligible for the EIC if their income for the year is under $34,000 for the year, a little less if not filing a joint return.

There are other “refundable credits” although not many. Most credits are non-refundable, which means they might take your tax to zero so you’ll get back all you paid in, but not more than that.

On the state side, it depends on the state.

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