My tax return amount is smaller than that of my tax breaks. Just confused how it all works. Example,My total breaks equal over 7 and im only getting 4 in return?you rock!

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1 Best answer

Level 15

Jun 4, 2019 6:56:14 PM

Some "Tax Breaks" are deductions from income, before the taxes are calculated.

Others are tax credits. But some of those are not refundable, so do not benefit your once your tax liability is down to zero. I call the latter "Empty Calories."

Level 15

Jun 4, 2019 6:56:12 PM

YOu need to be more specific. As an example of one thing many folks get confused on, lets talk about the dependent exemption. YOu get a $4,050 exemption for each qualified dependent you claim on your tax return. That does NOT mean the IRS will give you $4,050 for each qualified dependent you claim. IT means that $4,050 of your earned income is not taxed, for each qualified dependent that you claim.

Level 15

Jun 4, 2019 6:56:14 PM

Some "Tax Breaks" are deductions from income, before the taxes are calculated.

Others are tax credits. But some of those are not refundable, so do not benefit your once your tax liability is down to zero. I call the latter "Empty Calories."

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My tax return amount is smaller than that of my tax breaks. Just confused how it all works. Example,My total breaks equal over 7 and im only getting 4 in return?you rock!