fundy tax returns

[skrmom]

1. How long can someone deduct a SAHD-some are 30 ish, at home, and 'dependents' on their fathers, but well old enough to support themselves.

2. I guess there is no limit on the number of children, Do the forms have enough space for 18 children?

[Daenerys]

1. I don't know much about the US Tax system but I think it unlikely you could deduct anyone who is legally an adult. It's a choice to support them at that point, not an obligation.

2. Some fundy families, such as the Bates, have so many child deductions that they don't actually have to pay any tax at all.

[snarkbillie]

You can deduct adults if you provide over half their care and they live with you more than 6 months of the year. A lot of parents who have 20-somethings living at home can and do claim them as dependents.

[Grace]

So, basically JimBob probably gets back more on his tax return than he paid in during the year. I mean, that is A LOT of deductions. Do you think he refuses to take it all since that would be getting $$$ from the gov't? :roll:

[Sola]

So, basically JimBob probably gets back more on his tax return than he paid in during the year. I mean, that is A LOT of deductions. Do you think he refuses to take it all since that would be getting $$$ from the gov't? :roll:

Of course he'll take it. All the fundies do. I doubt that Dim Bulb has contributed to his country for the last 15 years.

I remember on one blog, I think it was the now defunct Wilkinsons blog, they had a few posts up railing about taxes and they didn't want their tax dollars to go to things they didn't believe in, like abortion services (which is ironic, as they don't). A few weeks later they posted that they had got their tax refund through and then not long after they posted that they'd got their Alaskan Permanent Fund dollars though too. They would not have contributed a penny yet got a huge amount of money back.

[apple1]

Here you go, from irs.gov-

Tests To Be a Qualifying Child

The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.

The child must be (a) under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), (b) under age 24 at the end of the year, a full-time student, and younger than you (or your spouse, if filing jointly), or © any age if permanently and totally disabled.

The child must have lived with you for more than half of the year.

The child must not have provided more than half of his or her own support for the year.

The child is not filing a joint return for the year (unless that joint return is filed only as a claim for refund).

Bottom line: 19-24 only if full-time student; >24, not a tax deduction

[ilovetchotchkes]

Actually Boob is probably not getting kids as deductions, unless TLC pays his "home church" instead of him and J'chelle directly http://www.irs.gov/newsroom/article/0,, ... 82,00.html

Erm, i mean as tax CREDITS. 3 hours of sleep. Teething toddler. :(

[snarkbillie]

Here you go, from irs.gov-

Bottom line: 19-24 only if full-time student; >24, not a tax deduction

I didn't say "child" I said "dependent". They qualify under the "qualifying relative" rule.

Here are those rules:

Qualifying Relative

There are four tests that must be met for a person to be your qualifying relative. The four tests are:

Not a qualifying child test,

Member of household or relationship test,

Gross income test, and

Support test.

Age. Unlike a qualifying child, a qualifying relative can be any age. There is no age test for a qualifying relative.

Bottom line: No age limit as long as you're supporting them.

http://www.irs.gov/publications/p501/ar ... 1000220939

[apple1]

Wow. (It looks like the "qualifying relative" exemption goes away if the potential dependent has an income of $3700 in the year. Guess these SAHDs don't have that).

[bananacat]

Yeah, it pisses me off that everyone has to subsidize their lifestyle, but on the other hand those kids didn't choose to be born into those families and this is the only welfare the parents will willingly take. My outrage over starving children is higher than my outrage over their parents gaming the system. Don't get me wrong, I'm mad that the parents are doing this AND managing to justify it to themselves. It's not an ideal situation but if it means the kids get fed then I'm glad it's available to them.

[Guest Anonymous]

1. I don't know much about the US Tax system but I think it unlikely you could deduct anyone who is legally an adult. It's a choice to support them at that point, not an obligation.

2. Some fundy families, such as the Bates, have so many child deductions that they don't actually have to pay any tax at all.

I don't really understand the tax system - but does this mean that BECAUSE they have so many children, they don't have to pay any tax at all? That doesn't make much sense :o

[Sunnichick31]

Actually Boob is probably not getting kids as deductions, unless TLC pays his "home church" instead of him and J'chelle directly http://www.irs.gov/newsroom/article/0,, ... 82,00.html

Erm, i mean as tax CREDITS. 3 hours of sleep. Teething toddler. :(

So off topic, but I just had to jump in to add this.

http://imgur.com/gallery/ygktZ

My friend's son is teething too, and she always wanted to give him cold food to numb his mouth a little, but never wanted to give him popsicles and things like that cause of the sugar, so I suggested this to her and I think it's worked out pretty well.

Back to your regularly schedualed programing.

[chaotic life]

The US tax code system allows you to claim a child tax credit per each dependent child in the home. I don't know the rules on a dependent relative that is not a child, so I can't explain that one at all. What I can tell you is that for each dependent child you claim, you get a credit on your taxes. I *think* it's $1,000 per child, but I don't do our taxes to say with 100% certainty.

There is no limit on the number of children you can claim on your taxes for the credit. Each credit then lowers your tax liability so you owe the government that much less in taxes during the year.

Now, MOST tax credits would only work if you actually PAID those taxes. The child tax credit works differently. If you didn't pay taxes to that amount of money, then you can get a refund on that credit. The adoption tax credit now works the same way. Before it did, adoptive families were instructed to apply the adoption tax credit first and then apply the child tax credit (actually called "another child tax credit") to get the maximum refund when doing an adoption.

So, we have eight children. That means we get a $8,000 credit on our tax liability. If our tax liability were $5,000 (just an arbitrary number), then the first $5K of the credit would go towards the taxes we owed and we would get a refund for the other $3K, even if we paid no taxes IN during the year. The more children you have, the higher your income has to be before you actually have to pay taxes into the system in the US.

In addition to this, low income families have what is called the Earned Income Credit. I really don't understand this one well, and have never actually qualified for it. You have to have earned at least a minimum amount of money in taxable income in a given year (I think it's $7K) and under a certain income. There is some formula you use based upon how many children you have, which allows you to claim income you didn't have. This one is NOT unlimited on how many children you can claim. I *think* you can only claim 2 or 3 children for it. Basically, it would say you had a higher income, meaning you get more funds BACK even though you didn't have the income, never paid anything into the system but got tons back. The Earned Income Credit is a form of wealth redistribution. It is specifically meant to return wealth that everyone has paid into the tax system to low income families who didn't earn it. IIRC, it's similiar to what Canada does for child payments but it's done only once a year in a lump sum instead of monthy. It's also MUCH less funds than what other countries pay out for child funds.

VERY FEW large families are paying taxes. It would require an extremely HIGH income. For large families, you would have to be in the top 5% of income earners to actually be required to pay taxes, and you don't have to be a mega family to hit that point, an ordinary large family is more than sufficient.

Now, that said, whether large families pay state and local taxes depends upon the tax structure of the state they live in. Even at lower incomes, we've always ended up having to pay at least *some* state and local taxes. Additionally, a lot of Fundies are counting what they pay into SSI and Unemployment as taxes. Those are not taxes and they are not refundable. They are federally mandated insurance programs (retirement and unemployment insurance). Granted, the government tends to borrow from those coifers to run other programs but they are NOT taxes.

Oh, and if you own a home and have a large family, I think you would have to be higher than even the top 5% of income earners before you would have to pay Federal taxes.

The US doesn't subsidize children the way a lot of other post-industrialized nations do, but they DO subsidize children. Families with lots of children don't pay a lot of taxes and even Fundies generally accept the wealth redistribution methods encoded in the tax schedule, without ever considering that it is a form of welfare.

[Rosa]

The child tax CREDIT, the one that pays out as long as you have some income, and can exceed your tax pay-in, is the one that's age-limited - up to 24 years old if a fulltime student. The dependent DEDUCTION, which reduces your taxable income so you pay less taxes, is the one that's not age dependent but is dependent on the person making less than $3700.

Out tax code is designed to reward people rearing children. It's a poor substitute for things they have in the rest of the civilized world, like paid maternity leave and schools that are not funded from local property taxes, but it's definitely there.

[Guest Anonymous]

Thanks for the explanation - but it makes it seem like an incentive to having loads of children, which is a bit strange :?

[Parkersmom120106]

Well you learn something new everyday. My mother claimed my son one year because I made so little (not even enough for earned income credit), so I was going to get very little back (talked to an accountant friend who said it was perfectly legal because we live with her and she was providing the housing/electricity and therefore supporting him). My sister was doing them for us and suggested claiming me (I was well over 24 at the time). It accepted it, but it didn't change anything on the return, it was the same amount of refund as it would have been with just my son claimed.

Also I have a friend who's cousin had 4 kids, she could only get credit for 3 of them so she had my friend claim the 4th and split the money with her (definitely NOT legal), and another friend had 4 kids and would have some random friend claim the 4th kid so she could get the money for him.

Maybe they would have been able to claim the 4th child, but wouldn't get as much back as letting someone else claim them? Dunno.

[bananacat]

Thanks for the explanation - but it makes it seem like an incentive to having loads of children, which is a bit strange :?

I don't really agree with this since it costs a lot more than $1k per year to raise a child. Anyone who thinks that having a child for the $1k per year credit will save them money would fail at basic arithmetic. I see it as more of a way for society to contribute the well-being of children, who have little power to do anything for themselves. It's sort of like welfare but it gets around the pride issue of the parents. I personally don't mind it even though I have no kids because I see it as more of an investment. The money I spend on supporting these kids is money that I will save in the future when they don't need as many other services.

[Marian the Librarian]

So for all the fundies' ranting about teh ebil gummint, they're perfectly happy to keep milking it when it comes to dependent-claiming stay-at-home-daughters in their 20s, 30s and beyond. And, of course, a lot of them probably call their insular family enterprises "ministries," which gives them non-profit religious status. (I'm looking at you, Maxwells and Botkins.)

[Rosa]

To be fair, the reason Congress likes to imbed these as tax incentives instead of plain cash payouts (like the parent stipends they have in France and some other countries) is that most people have no idea how it works, so nobody complains about the welfare/transfer of wealth aspects. There's a lot of stuff hidden in there - mortgage interest deduction, medical cost deduction, all sorts of refundable credits like the Hope and Lifetime Learning credits.

And I have to say, I had to use tax software this year (the state went to e-file only but you can only file using tax software or a paid tax preparer unless you are under a certain income level...I need to call my state Senator and complain because that's effectively a mandatory charge to file your state income tax return.) It's the second time I've used the software and I really think that makes it even harder to know what's going on with your taxes - unlike the plain tax forms that say "if you qualify by this, this, and this you are eligible for this tax credit which can increase your return even if you paid less taxes than the credit" (I would have to look up my paper forms from last year, but they are very, very clear.)

[RR88]

Isn't it also true that Jim Bob and Michelle don't pay property taxes, since they've classified their home as a church? I'd guess that the bulk of the taxes they pay are in sales taxes. $3000 a month for groceries ($5000, depending on what Michelle feels like telling the person who's interviewing her), all that "used" clothing (not!), fake pigtails for Josie...then again, I don't know if Arkansas charges sales tax on food items. It probably does on all those paper plates and plastic cutlery, though!

[Kitchen Princess]

To be fair, the reason Congress likes to imbed these as tax incentives instead of plain cash payouts (like the parent stipends they have in France and some other countries) is that most people have no idea how it works, so nobody complains about the welfare/transfer of wealth aspects. There's a lot of stuff hidden in there - mortgage interest deduction, medical cost deduction, all sorts of refundable credits like the Hope and Lifetime Learning credits.

And I have to say, I had to use tax software this year (the state went to e-file only but you can only file using tax software or a paid tax preparer unless you are under a certain income level...I need to call my state Senator and complain because that's effectively a mandatory charge to file your state income tax return.) It's the second time I've used the software and I really think that makes it even harder to know what's going on with your taxes - unlike the plain tax forms that say "if you qualify by this, this, and this you are eligible for this tax credit which can increase your return even if you paid less taxes than the credit" (I would have to look up my paper forms from last year, but they are very, very clear.)

Your tax software can, you know, just print out the whole thing, as if you did it on paper, you know?

[Katiebug]

Thanks for the explanation - but it makes it seem like an incentive to having loads of children, which is a bit strange :?

It costs a heck of a lot more than $1000/year to raise a kid - you could maybe spend that much to care for a breastfed infant with mostly handmade and hand-me down clothing, an inexpensive car seat, a borrowed crib, $100 or $150 worth of cloth diapers, and a parent or other caregiver at home (i.e. no paid child care). There wouldn't be a lot left over for toys, books, or other enrichment items and activities.

We added up what we spent on our kid while I was pregnant and during her first year. It's downright frightening, especially when you include the insurance deductible and out of pocket portion of the hospital bills. Of course we could have done it for cheaper and now we have most of the gear that would be needed for future babies too, but it's still crazy! We spend more than $12,000 a year on child care alone.

[chaotic life]

Yes, my grocery budget rivals my housing payments. I figure when the kids are all grown and gone, I'll be able to eat gourment, orgnanic, high end food and STILL save money compared to the bare-bones basics I spend now. I would save some on my groceries, but I refuse to give up fresh produce. Utilities cost more, housing requires more income because you need more space (I refuse to stack my kids like firewood tyvm), extra-curriculars add up, medical bills, etc, etc. Heck, the child tax credit doesn't even cover the cost of my oldest's sport's program and I'm not about to stop offering such things.

I *have* known some extremely poor parents that the tax funds do cover a great portion of what they spend on their kids annually. However, I've also seen their quality of living and I would never allow my children to live under those conditions. I once knew a family with 6-8 kids who lived in an 850sqft house. After #8, they finally had to find a bigger house. So, I won't say you *can't* raise a large family on what the government provides. If you count EBT, medicaid and tax incentives, I think there are some families who DO. I've known quite a few Fundie/Quiverful families who bemoaned the government but took EBT and simply skipped medical care. It's just not a good and healthy way to raise children. It doesn't come anywhere CLOSE to what I spend on my kids in a given year.

[Coconut Flan]

And, of course, a lot of them probably call their insular family enterprises "ministries," which gives them non-profit religious status.

Having a "ministry" does not equal non-profit religious status. They have to file paperwork as an actual church organization and also get formal non-profit status as an organization from the IRS. It isn't terrible complex, but does have to have approval.

The Duggars do not try to claim their home as a church for property tax purposes. The county tax assessments are the same for them as the others in their county. It more than likely wouldn't fly if they tried.

[skrmom]

I checked, and the deduction per qualifying child for 2011 wa s$3,700

The Duggars have 18 childen at home.

18 x 3,700 =66,600

Rather odd, don't you think?