This might be a dumb question. But if you get a tax credit that is greater than the tax due, does the government pay you that amount. For example, if I got the $7,500 EV tax credit and I owed the government 2,000 in tax, would I get 5,500 back? Or would my tax bill just be 0? Thanks!
How does one buy and sell tax credits. With the green new deal and the carbon tax coming this would be awesome because you could make some serious capital buy holding some tax credits.
These credits reduce your federal tax owing. However, if the total of these credits is more than your federal tax owing, you will not get a refund for the difference. FROM THE WEBSITE
If you own your own company, aren't almost all work expenses tax deductable (lunch, gas, supplies, etc.)? If I have a $14,000 taxable income but have $14,000 in deductions because I ate out every lunch and drove a lot for work, doesn't that mean I pay $0 in taxes? Can someone explain to me where I'm wrong please.
Some deductions have caps on how much can be deducted. I don't want to give specifics because it all depends on the type of corporation and type of deduction. Just suffice it to say that you can't always deduct 100% of your taxable income.
It depends. Certain tax credits (e.g., the Earned Income Tax Credit in the U.S.) are "refundable" which means you get a refund if your tax credit exceeds what you owe. Some tax credits, however, are not refundable
So income tax is automatically deducted for salaried employees. If tax credit is greater than taxes you have to pay, and it's non refundable (for eg. tuition) then taxes owed just goes to zero and you get nothing back? Even if you paid more in taxes than what you were supposed to?
Does tax deduction change the tax bracket?, Example total taxable income=18k(12% bracket), with 12k standard deduction, does my bracket drop to 10% or stay at 12%?
what if you don't owe any taxes, does that credit do anything. im always arguing with my wife about this. we always end up getting a little bit of money back and thinks its our daycare credit. but i think if you dont end up owing money then the credit is useless. can anyone tell me whos right
It depends on whether the tax credit is refundable or nonrefundable. If the tax credit is refundable (e.g., the Earned Income Tax Credit in the U.S.), you will actually get money from the government even if you don't owe any taxes. For tax credits that are nonrefundable, however, the tax credit will have no value if you don't owe any tax.
@@Edspira Bullshit! What do you think the deductions from our paycheck is? He said he does not owe money to the IRS because he got tax deduction {withheld money} on his paycheck. He should get that money back.
so very extremely helpful!!! Saved my life and my finals!!
You gave the best explanation ever! I didn’t find anything so comprehensible and simple anywhere else on the web - they were talking nonsense
Very easy to understand, thanks for the examples!
This video explains it so clearly all the other videos on RUclips are rubbish ... way too complex
Great Video! Very easy to understand. Appreciate the clear step by step explanation.
Fantastic video and explanation.
Thanks!
Great visual comparison and example!!! thank you for making it so simple!
My pleasure!
Thank you for this concrete, clear explanation with actual numbers as examples!!!
Perfect to the point explanation. Thank you!
Very clear example
Thank you for this comparison. Very well done
Finally understood this. Thank you so much!
Great to hear!
Spectacular explanation!!!
That was a fantastic example. Thanks buddy
Very good. thank you! You just helped me with my class!
Nice video! Thanks!
Thank you 🙌.Direct explanation
very helpful for my tax law class!
very useful
very clear explanation and examples. Thanks.
SO CLEAR! THANKS!!
Thank you for that!!
Thank you for this!!!
great video!!!
Thanks Max Starr!
Amazing!
With deductions though would you end up keeping $550 overall?
Does deductiom reduce overall income or just taxable income?
Excellent video thanks!!
Very clear explanation
Good shit bro 👍
Thank you
Excellent.
This might be a dumb question. But if you get a tax credit that is greater than the tax due, does the government pay you that amount. For example, if I got the $7,500 EV tax credit and I owed the government 2,000 in tax, would I get 5,500 back? Or would my tax bill just be 0?
Thanks!
I’ve got the same question. Someone please respond.
@@aaronherrington7785 same question here
Same
Well explained
I had a hard time understanding until watching this
Thanx
How does one buy and sell tax credits. With the green new deal and the carbon tax coming this would be awesome because you could make some serious capital buy holding some tax credits.
Just one question... Does the govt pays the tax credit or it simply reduces the liability of tax?
What if you have $100 tax due to the IRS. Does the $500 credit turn it into a $400 tax refund??
Depending on your tax obligations and how you file taxes, your statement is theoretically correct but consult with a competent CPA.
Very good question. I have the same one. We have a lot of taxes withheld, so we don’t usually pay much at the end of the year.
These credits reduce your federal tax owing. However, if the total of these credits is more than your federal tax owing, you will not get a refund for the difference. FROM THE WEBSITE
If you own your own company, aren't almost all work expenses tax deductable (lunch, gas, supplies, etc.)? If I have a $14,000 taxable income but have $14,000 in deductions because I ate out every lunch and drove a lot for work, doesn't that mean I pay $0 in taxes?
Can someone explain to me where I'm wrong please.
Some deductions have caps on how much can be deducted. I don't want to give specifics because it all depends on the type of corporation and type of deduction. Just suffice it to say that you can't always deduct 100% of your taxable income.
If you have both a deduction and a credit, do you subtract the credit from the deducted taxes?
Flawless video
Thank you!
What happens when your tax credit is more than the taxes you owe? Do you get a refund, or lose the tax credit?
It depends. Certain tax credits (e.g., the Earned Income Tax Credit in the U.S.) are "refundable" which means you get a refund if your tax credit exceeds what you owe. Some tax credits, however, are not refundable
@@Edspira what about the EV electric vehicle 7,500 credit ?
What’s the catch to tax credit cause that’s has to be to good to be true! ( is there’s any fee you have to pay to get a tax credit? Things like that)
So you would calculate all your deductions first then credits?
tq
Can my tax credit be greater than my taxable income?
If it is a refundable tax credit, then it can reduce your tax liability below zero and allow you to receive a tax refund.
So income tax is automatically deducted for salaried employees. If tax credit is greater than taxes you have to pay, and it's non refundable (for eg. tuition) then taxes owed just goes to zero and you get nothing back? Even if you paid more in taxes than what you were supposed to?
Does tax deduction change the tax bracket?, Example total taxable income=18k(12% bracket), with 12k standard deduction, does my bracket drop to 10% or stay at 12%?
it drops
Your fcuking genius man 🔥
ok how can get tax credit ?
Volunteer where they offer tax credit. Fire Fighter is a good example
what if you don't owe any taxes, does that credit do anything. im always arguing with my wife about this. we always end up getting a little bit of money back and thinks its our daycare credit. but i think if you dont end up owing money then the credit is useless. can anyone tell me whos right
It depends on whether the tax credit is refundable or nonrefundable. If the tax credit is refundable (e.g., the Earned Income Tax Credit in the U.S.), you will actually get money from the government even if you don't owe any taxes. For tax credits that are nonrefundable, however, the tax credit will have no value if you don't owe any tax.
@@Edspira Bullshit! What do you think the deductions from our paycheck is? He said he does not owe money to the IRS because he got tax deduction {withheld money} on his paycheck. He should get that money back.
What happens if your tax due is 0 and you have a tax credit of say 2000 for solar panels let's say
You get a check for $2,000
@@tony9131 If it's refundable
@@kene3988 as long as she paid more than $2000 though out the year in taxes. IRS is not riding checks, they can only refund some of your tax money.
Very easy to comprehend, but whats the purpose of tax credit and deduction and how will it effect us later?