Child Tax Credit Checks

[spaggyroe]

I understand Nate's point and don't entirely disagree with it. The one part he missed is that those who do not file taxes do not get the child tax credit. This tax credit is specifically based on tax filings, and you only get the normal full tax credit if you file taxes anyway (even if you don't owe and get the credit back) I will say, that since this credit is not likely to go away at all (let's be real here) Then I think this way of doing administering it is likely the best way to actually help kids and families that struggle. It reminds me of a lottery winner. Give someone a larger, lump sum and they are likely to burn through it faster then normal because they tend to think in terms of "Now I can buy XX that I've wanted" They are not good about saving...and this is not a conservative vs. liberal thing. People today, regardless of political leaning are in debt and basically terrible with money. The monthly check may get spent on frivolous things in the beginning, but in the long run it would likely help people buy food and other necessities in an ongoing manner...helping them to keep their heads above water just slightly.

Correct. If one did not file taxes in the first place, they would not receive a tax credit. I'm not sure why one wouldn't file though? I suppose if their income was < $12,400, but in that case they wouldn't have to pay any taxes anyhow. If that's the case, they shouldn't receive a tax credit anyhow, as they didn't pay any taxes. Maybe I'm missing something here?

Another reason that the monthly child tax credit checks are a farce, is that the exact same result could be achieved by adjusting one's W4 form to reflect the proper amount of withholdings required in order to net as close to $0 owed to, or received from, the government come April 15th. Everyone should be doing this regardless.

To me, the child tax credit checks are an indicator that American's need more knowledge / education regarding how the tax system works. This program is no different than if the government went in and adjusted everyone's W4 form for them.

 

[glockman]

Correct. If one did not file taxes in the first place, they would not receive a tax credit. I'm not sure why one wouldn't file though? I suppose if their income was < $12,400, but in that case they wouldn't have to pay any taxes anyhow. If that's the case, they shouldn't receive a tax credit anyhow, as they didn't pay any taxes. Maybe I'm missing something here?

Another reason that the monthly child tax credit checks are a farce, is that the exact same result could be achieved by adjusting one's W4 form to reflect the proper amount of withholdings required in order to net as close to $0 owed to, or received from, the government come April 15th. Everyone should be doing this regardless.

To me, the child tax credit checks are an indicator that American's need more knowledge / education regarding how the tax system works. This program is no different than if the government went in and adjusted everyone's W4 form for them.

This was my first thought. You can adjust your withholding and do exactly what this check does. However, I really believe the people who would need it the most, A) already claim more than they should and owe at tax time, or B) are too dumb to adjust their withholding.
One of my peers at work actually claimed 10 and owed thousands at tax time for years in a row. He then had to setup payment plans for consecutive years. He was so behind, the IRS took away his ability to change his W4. That is the level of intellect and money management skill that is prevalent in the general population.

 

[spaggyroe]

One of my peers at work actually claimed 10 and owed thousands at tax time for years in a row. He then had to setup payment plans for consecutive years. He was so behind, the IRS took away his ability to change his W4. That is the level of intellect and money management skill that is prevalent in the general population.

Yikes! Yeah, you do NOT want to be on bad terms with the IRS...

 

[jeeper]

This was my first thought. You can adjust your withholding and do exactly what this check does. However, I really believe the people who would need it the most, A) already claim more than they should and owe at tax time, or B) are too dumb to adjust their withholding.
One of my peers at work actually claimed 10 and owed thousands at tax time for years in a row. He then had to setup payment plans for consecutive years. He was so behind, the IRS took away his ability to change his W4. That is the level of intellect and money management skill that is prevalent in the general population.

But at least we teach proper pronouns for our peers in school. Unfortunately, the IRS doesn't provide us with safe spaces.

 

[johngottfredson]

I'm with Kevin that the problem here is grooming the public to start to enjoy regular checks from the gov.

Those who are concerned with the tax burden come April sound like the people I hear that think that large gas tanks increase their fuel cost.

 

[johngottfredson]

Also, it seems there are plenty who are concerned that the April tax problem will negatively affect the people this money is targeted to help. I say that's a great antidote to the soothing effect of surprise money in the mail. A terribly painful tax event helps clarify what the IRS means in our lives, and they can get in touch with Milton Friedman's edict: there's no such thing as a free lunch.

 

[benjy]

…and flat tax rate.

Income? I like the simplicity, but it ends up too regressive to the lower class (perpetuating the reliance on the system). I do appreciate some aspects.

I think the more effective approach is in a land value/single tax. The incentive should be to tax the potential whether realized or not, not penalize the success. So much wealth is derived from not adding any value to the economy, and a LVT could right that.

It would cause too big of a disruption in wealth distribution to actually happen, but conceptually I think it’s a better solution for gov’t services.

 

[Gravy]

@benjy you're right of course there's no room for a pragmatic solution in government LoL

 

[mesha]

But at least we teach proper pronouns for our peers in school. Unfortunately, the IRS doesn't provide us with safe spaces.

Weird statement.

 

[jeeper]

Weird statement.

Well, if you knew anything about schools or teaching, you’d understand better.


But for reals, when I was in school, we learned very little about practical finances and taxes. I can only imagine it is worse now.
I guess it’s quite possible the rest of the school leaned it, and that I skipped class that week.

 

[mesha]

Well, if you knew anything about schools or teaching, you’d understand better.


But for reals, when I was in school, we learned very little about practical finances and taxes. I can only imagine it is worse now.
I guess it’s quite possible the rest of the school leaned it, and that I skipped class that week.

A financial literacy class is required to graduate high school in Utah. However, we have been teaching math forever and that didn’t seem to help people use math to do taxes and finances. 😉. My guess is kids taking financial literacy will say, “what are we ever going to use this for”. Just like they did about math and then not pay attention.

 

[jeeper]

A financial literacy class is required to graduate high school in Utah. However, we have been teaching math forever and that didn’t seem to help people use math to do taxes and finances. 😉. My guess is kids taking financial literacy will say, “what are we ever going to use this for”. Just like they did about math and then not pay attention.

I do “carry a calculator in my pocket“ now.. so there is that. I just wish I knew how to use it better. There should be a calculator class in school 🤦🏼‍♂️

 

[UNSTUCK]

My guess is kids taking financial literacy will say, “what are we ever going to use this for”. Just like they did about math and then not pay attention.

This was me, but with 10th grade English class while studying Robert Frost!!!!

Then just last Sunday, for the first time ever, I quoted, "The Road Not Taken" in my lesson at church. It was a humbling experience.

 

[Pike2350]

The bigger problem with financial literacy is that a good majority of people can't think past the "now" so they can't understand that saving for a rainy day is a good thing. Most people (myself included for the first 35 yrs of my life) felt "I can just put an emergency on a credit card" They may pay off their credit card every month, or carry a small balance, but don't worry about what happens later. They think about the monthly payments and how/if they can afford them now...not what it will take to afford later.

This also goes with taxes, and the .gov has made it so complicated that in some ways I understand why people don't understand. They can't tell the difference between a deduction or a credit, between the different types of credits and how they phase out. Hell, most people don't even understand beyond their withholdings and what that means for their tax bill.

 

[UNSTUCK]

This also goes with taxes, and the .gov has made it so complicated that in some ways I understand why people don't understand. They can't tell the difference between a deduction or a credit, between the different types of credits and how they phase out. Hell, most people don't even understand beyond their withholdings and what that means for their tax bill.

For me it was Turbo Tax, the first year I used it, when I was younger and dumber. It shows your refund/liability at the top of the screen and updates you as you move forward. I'd click an option and see what happened. What ever option gave me the best refund at that point is the option I went with.

That was a rough year for me.

 

[Cody]

I pile a bunch of shit on to my accountant and say "make this better".

The nice thing about having hundreds of thousands of dollars in business loss is that I have a lot of business loss to offset income for the next, like, ten years ha ha.

I completely understand where the $300 payment I received comes from, and personally It does help me to get it monthly right now instead of at the end of the year. As mentioned above, I have plenty of other things working for me to help reduce my tax burden

Cody