Working for Nothing

[BP.]

Client, married, two kids. Rents. W-2 for $15,000. Doesn't work half the time.

Next client, married, two kids. Rents. W-2 for $37,000. Works every chance he gets.

Is it just me, or is the second guy working for nothing considering the amount of taxes and refundable credits involved??

That could be one person's short term view, but factor in things like SS earnings credits; health ins coverage for guy 2 & family; an earnings record for future credit needs (house, car) or for unemployment benefits; a job & salary history for future employment; a good example to his kids; and that priceless self respect. Guy 2 is way ahead in the big picture.

[erchess]

Rita

I have two thoughts for you to consider.

First let's look at that $8,400. School is in session 3/4 of the year at best and without incurring child care expenses she could only work school days and school hours. What would her rate of pay have to be to replace the $8,400 and what are her odds of getting a job with that rate of pay? The truth is that I don't think most two parent families come out economically ahead by having two incomes.

Second let's compare what that family has versus what we on this board have. The man in that family is more likely than not never going to increase his paycheck above the rate of inflation and when he retires he's unlikely to have much more than Social Security to live on. Most of us on this board have or will eventually have good retirement plans and higher rates of pay than this guy.

[WhiteOleander]

I had a married couple, two kids, receive a 2500 refund. The wife said that is not enough. Her friends are getting 7000-8000 back and she wants the same. I tried to tell her that w/o looking at their returns, i couldn't be certain what the differences were. However, the friends were probably earning in the neighborhood of 25000 to get the max for EIC. I told her even with the large refund, her friends were way below her household income. Her friends did not have nearly as much disposible income.

Wife did not care. Said it wasn't fair. Wanted me to file them each HOH with one chuld so their EIC would increase. I refused. They left.

[RitaB]

I know what you mean!

Client, married, two kids. Rents. W-2 for $15,000. Doesn't work half the time.

Next client, married, two kids. Rents. W-2 for $37,000. Works every chance he gets.

Is it just me, or is the second guy working for nothing considering the amount of taxes and refundable credits involved??

I did a return for a nice family where the husband works and the mom stays home. All three kids are in public school, so mom COULD work, even if part-time, and the kids wouldn't be affected all that much, in my opinion. Anyway, he made $25,000. They had no liablity, plus received $8400 in credits. So, what incentive is there for them to make more money?

It was kind of depressing to me, really. I hate to say that, but I am working my tail off, paying taxes, and it appears that I am being penalized for having some ambition.

[erchess]

I think

the point of OP was that after taxes the guy who worked a lot less came out even with or perhaps slightly ahead of the guy who worked every chance he got. Many Americans have a problem with that. I am not among them.

[Bert73]

Client, married, two kids. Rents. W-2 for $15,000. Doesn't work half the time.

Next client, married, two kids. Rents. W-2 for $37,000. Works every chance he gets.

Is it just me, or is the second guy working for nothing considering the amount of taxes and refundable credits involved??

The second guy hopefully is socking away some of his dough for a rainy day. He has so much more wiggle room when it comes to his finances, than the first guy. He might not be the all time winner of a huge refund but he probably can meet his daily needs.
The first guy is barely making ends meet and has two children to feed, clothe and educate for along time.

[ChEAr$]

Client, married, two kids. Rents. W-2 for $15,000. Doesn't work half the time.

Next client, married, two kids. Rents. W-2 for $37,000. Works every chance he gets.

Is it just me, or is the second guy working for nothing considering the amount of taxes and refundable credits involved??

Question is, whether he would be getting all those credits without kids and working,
since EIC is based on earned income and so is the Making work pay credit.

[Snaggletooth]

Client, married, two kids. Rents. W-2 for $15,000. Doesn't work half the time.

Next client, married, two kids. Rents. W-2 for $37,000. Works every chance he gets.

Is it just me, or is the second guy working for nothing considering the amount of taxes and refundable credits involved??