My theory is simply this: Those that fail to claim their "refund" will be
audited!
Chris Kotting wrote:
> Wait a second. This is not an advance. When you get a tax refund, is
> the government "giving you money"? No, it is giving you BACK the money
> you OVERPAID on your taxes, through withholding over the course of the
> year. That's why it's called a refund.
>
> The amount of the checks that are being cut varies according to some
> broad rules. The broad rules basically follow the decreases in the tax
> rates applicable to those broad categories of people.
>
> Now, did you adjust your withholding to correct for the reduced tax
> rates? I didn't bother, and neither did most people. So more is being
> withheld than is needed to pay your taxes, so that means a bigger refund
> after you file your tax return. All that is happening here is that the
> money that is being needlessly withheld and WOULD BE IN YOUR REFUND is
> being sent back to you this year instead of next year.
>
> There may be some folks for whom the broad rules miscalculate the exact
> amount of the difference, but for MOST people, assuming that their
> financial circumstances haven't changed appreciably, the check won't
> significantly change their refund from what they got last year, because
> it parallels the reduction in tax rates.
>
> Even assuming that the check is greater than the actual reduction in
> your taxes due to the changes in rates, you will end up paying the
> government only because your withholding (check) UNDERPAID your taxes.
> It's still not an advance. If anything, it is "undoing" some of the
> excess withholding from your paycheck.
>
> In short, it's not an advance when it's your money in the first place.
>
> Chris K.
>
> Bruce Lowry wrote:
> >
> > Sorry, I just restudied the facts. Previous law was that the first
> > 6000.00 was taxable
> > at 15%. new law for 2001 is that first 6000.00 is taxable at 10%. This
> > check is for this particular area. Married and head of household rules
> > vary, but this is and ADVANCE of this money.
> > Bruce Lowry
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