Tax return is nearly $3000 LESS because I worked part-time last year!

[Leader of the Club]

I worked part-time last year earning $6,000. Our tax return is going to be nearly $3,000 less than if I hadn't worked at all-because of EIC. I'm really bummed out. I feel like I worked for a whole lot less now. And I work at a very hard, physically demanding job w/ no climate control! and I had to pay for child care during summer and school breaks.

I need to re-think this whole work thing. I don't mind working, but I don't want to lose money doing it!

 

[sam_gordon]

Do you itimize? The money you spend for child care so that you can work is deductible.

 

[disneychrista]

You don't have to itemize to get the dependent care deduction.

 

[pixiepower1971]

If I read this correctly she is saying that after taxes she really only made $3000 - child care expenses. I bet that works out to very little per hour! I wouldn't be happy either and would reevaluate the situation. Many times a dual income is not as beneficial as it looks on the surface, especially if the second income is part time/low wage. Tax implications, work related expenses and child care eat up that income quickly!

 

[dislal]

Please, feel free to have the rest of us work for you...

wow that was a little harsh!!

If I read this correctly she is saying that after taxes she really only made $3000 - child care expenses. I bet that works out to very little per hour! I wouldn't be happy either and would reevaluate the situation. Many times a dual income is not as beneficial as it looks on the surface, especially if the second income is part time/low wage. Tax implications, work related expenses and child care eat up that income quickly!

 

[MPwifey]

Kind of a hijack, sorry OP. Is there any reason why someone wouldn't get credit for a childcare deduction? As in you get no deductions or credits for a child at all? ( who has no income and lives with both married parents?)

 

[Shelly F - Ohio]

I agree with PixiePower the thought of really only making $3,000 is really disappointing. Especially with the cost of gas being what it is makes working seam not worth while.

 

[Karlzmom]

I am not being as unpleasant as some may be...honest to. I just want to make sure I understand. You used to get money that you didn't pay in to the system in the form of EIC [as opposed to getting a refund of money paid in], but now because you worked there will be $3,000 less in EIC coming to you? Is this correct? If so, I feel for you on a personal level, because it must be disappointing to feel like you are getting less of "your" money. No doubt it was counted on, and expected in the household budget.

However, in the macro sense, this is what SHOULD happen. EIC is a wealth transfer from some to others. It is not designed to be an incentive to not work. The money paid out in EIC is money collected from someone else! Imagine the government going to your next door neighbor and saying hand me $3,000 of what you earned to give to the Jones' next door.....? Now, if the government would just not collect the $3,000....of course they still will and just spend it elsewhere....

At any rate, sorry you got an unhappy surprise.

 

[pixiepower1971]

I am assuming OP is married and basing this info on joint filing. If she hadn't worked at all, based on husbands income, they would have received a larger return.

Her "contribution" to the family income may not be very much after all working expenses are subtracted. The time she spent working may very well have even put her in a negative situation if you add up all expenses that she incurred working that would not have been spent if she was home with kids. Dinners out, work clothes, miles on car, gas, etc. Its very disheartening to find out you were working for nothing all year after you do your taxes!

 

[disneychrista]

The time she spent working may very well have even put her in a negative situation

This happened to me when my kids were very small. I went back to work (at just above minimum wage). By the time I paid for child care, I was paying MORE out then I was bringing home. Of course there was no reason to continue to work, so I quit.

 

[summerrluvv]

That stinks OP.

Every thread that mentions the EIC has gone down in flames in the past. I would lock this one asap because people can get really dirty on here.

 

[pixiepower1971]

This happened to me when my kids were very small. I went back to work (at just above minimum wage). By the time I paid for child care, I was paying MORE out then I was bringing home. Of course there was no reason to continue to work, so I quit.

It happened to me too! It's quite an eye opening experience.

 

[Ava]

This happened to me when my kids were very small. I went back to work (at just above minimum wage). By the time I paid for child care, I was paying MORE out then I was bringing home. Of course there was no reason to continue to work, so I quit.

This is part of the reason why we chose for my partner to be a SAHM. By the time we paid for childcare, she'd bring home very little. Not worth it.

(And no, I don't qualify for the EIC.)

 

[DVCBELLE]

I am a SAHM and everytime we have considered me working - we take tax implications, childcare, gas, car wear and tear, wardrobe and eating out into account and it just doesn't make financial sense for me to work!

I feel for you OP...my DH is currently unemployed and is doing contract work. We had considered me going back to work but he got this contract and it will tide us over so I don't have to - but it was very disheartening to me to realize that with the jobs I could get - I would have to work between 15 to 20 hours to make as much as he is making in 1 hour. Now - he is an attorney and I don't think that I should make as much as him since I only have a bachelor's degree - it just makes my one hour of work seem like a lot less!!!

 

[HHSTigerFan]

EIC is welfare, to collect that when there is a way to avoid it is a prime example of why this country is in the shape it is, too many people expecting freebies.

 

[Karlzmom]

I am assuming OP is married and basing this info on joint filing. If she hadn't worked at all, based on husbands income, they would have received a larger return.

Her "contribution" to the family income may not be very much after all working expenses are subtracted. The time she spent working may very well have even put her in a negative situation if you add up all expenses that she incurred working that would not have been spent if she was home with kids. Dinners out, work clothes, miles on car, gas, etc. Its very disheartening to find out you were working for nothing all year after you do your taxes!

There have been articles written for years about how many two income families would be further ahead to become a one income family when the taxes and work expenses are added to the increased transportation, convenience foods and child care expenses are added together. In some truly perverse situations, the family pays to send the second "wage earner" to work!

 

[mom2val]

EIC is welfare, to collect that when there is a way to avoid it is a prime example of why this country is in the shape it is, too many people expecting freebies.

I thought EIC stood for earned income credit. I thought the OP meant that because she worked and raised her families income they no longer qualified for the credit.

 

[pintamino]

So to you in makes sense for someone to continue to work when they make less than they are paying out in child care? Please explain to me why!

I think what she means is that to collect the money from the government when you have the physical well-being and a job to work at to get that same amount of money is wrong. EIC is essentially welfare.

I understand not working if you're going to come out behind, but to say "oh well this is easier" and take money from welfare instead of working for it may be legal, but it sure isn't ethical.

 

[Ava]

I thought EIC stood for earned income credit. I thought the OP meant that because she worked and raised her families income they no longer qualified for the credit.

You are correct. EIC does stand for "earned income credit." It's not a refund of money paid in in taxes, it's a credit which has nothing to do with the amount of taxes a person did or did not pay into the system. So technically, it is a form of welfare.

 

[Tweevil]

I have never gotten EIC. Single parent here and I could never understand that one. Some friends of mine received the credit and they never worked as much as I did.

I think it's mis-named - the earned part is confusing.

A family member had the same thing happen that the OP did. She got a part time job to help with the kids school expenses and household extras and the family got banged on their income tax return. They took a bigger hit dollarwise than she made.

I still don't get it though, seems like it works the opposite of how it should.

I should investigate it more for a better understanding though I suppose...