- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Get your taxes done using TurboTax
To address your last question, this means that the credit generated by your expense will be applied only to taxes you were assessed, not what your refund is.
If you have a refund because of your withholding, then the credit is applied to the tax before the withholding. This may have the effect of increasing your refund.
But if the credit exceeds the taxes that were assessed (before withholding and estimated taxes), then the credit will be limited to the amount of taxes you were assessed.
For example, you were assessed $3,000 in taxes, and your withholding is $4,500. If you credit is $1,500, then the $1,500 will be applied to your assessed tax, and the amount of your withholding will increase your refund by the $1,500.
If you were assessed $3,000 in taxes, and your withholding is $4,500. If you credit is $4,500, then only $3,000 of the credit will be applied to your assessed tax, and the amount of your withholding will increase your refund by only the $3,000.
**Mark the post that answers your question by clicking on "Mark as Best Answer"