I am a single mom and I received a decent refund last year but I made more this year. Last I checked I was told I had still not gone over a certain tax bracket which would lower my refund if I make over a certain amount this year. Last year I made about 12000.00. This year so far it is 19000.00 about. What is the amount or tax bracket amount that would hurt me and lower my refund this year. Or should I say next month when I file? Thanks So Much ~
Samantha you pay 10% on first $8,350 of taxable income and 15% on any portion over that. your taxable income is about: 19,000 (5,700) standard deduction (7,300) 2 personal exemptions --------- 6,000 You are still in the 10% tax bracket. This is same as last year for you.
You won't start to incur any tax liability until your income exceeds $15,650. You get a standard deduction of $8,350 filing as Head of Household plus 2 personal exemptions worth $3,650 each. At that point the next $11,950 is taxed at 10% and the next $33,550 is taxed at 15%. With $19k of income, you are in the 10% bracket and at $19k your tax would be $335. However since you have a child the dynamic changes significantly. Assuming that your income is earned income from a job and your child will be under age 17 as of Dec 31, 2009, the Child Tax Credit wipes out your tax completely. You'd also pick up a refund of $665 from the Additional Child Tax Credit and about $2,627 from the Earned Income Credit plus another $400 from the Making Work Pay credit. A quick check shows that you'd be getting a refund of at least $3,692, plus whatever was withheld from your pay for Federal income taxes. Therefore your effective Federal income tax rate is a negative 19.4%. In your case your tax bracket is really irrelevant.
