Non Sequitur by Wiley Miller for April 12, 2015

Having a reason to celebrate doesn’t mean it has to be a good reason, just that there is one at all.

If your income falls below the poverty line, you can claim EIC, and that’s “free” money. It’s an absolute pittance that wouldn’t pay a month’s rent in most places, but it’s something I guess.

there are many ways to take away your tax refund…six dollar a pound ground beef for example….

I, on the other hand, after paying taxes all year and refinancing my mortgage, now owe the IRS for the first time in my life. A lot more than I ever got back, too. So, according to Obviousman, I guess I should be celebrating.-I’m NOT.

If the money is in my bank (not paying much) until I pay taxes and send them a check, at least the piddling interest has come to me.

Of course I don’t mind paying my taxes for highways and benefits, just wish so much of it wasn’t going to the MIC.

Forget ISIS or Iran getting the bomb, the first candidate that says they will abolish the IRS and institute a flat tax gets my vote. You listening Scott Walker, Rand Paul?

From the IRS Form 1040 instructions on whether a federal income tax refund is taxable:None of your refund is taxable if, in the year you paid the tax, you either (a) did not itemize deductions, or (b) elected to deduct state and local general sales taxes instead of state and local income taxes. State or local income tax refunds are taxable if you took them as a deduction in the tax year the refund applies to.

Some states give a rebate for homestead, rent paid, or an amount of sales tax paid. These state refunds are taxable at the federal level, and reported on Form 1099-G. Surely that is what Obviousman meant….

dukedog. It’s not true either, if it was federal tax refund either, just state. See Kymberleigh’s comment above.

That’s why the world needs an Obviousman! Economic ignorance abounds.

Federal tax refunds are NEVER taxable as income. As stated before, state and/or local tax refunds are taxable if they were taken as an itemized deduction in the year for which they are filed. I’m speaking as the former tax manager for a CPA firm.

Hmmm…. I can be sure to not overpay, but then I also have to be sure to set money aside for when I have to pay in extra for taxes; while trying to avoid the temptation, all year long, of using the savings.

Or… for the lost of less than fifty cents interest, I can let the excess money be withdrawn in a way that I don’t even notice, and come tax season I can enjoy a pleasant little refund and actually have enough to treat myself to something that would otherwise be unbudgetable.

Not really that tough of a decision. My country is worth sacrificing the few extra cents a year.

What do we really know about this “Obviousman”?! Where did he come from? Who is supporting him? Where is his birth certificate?

There is no such thing as free money. Period.Somebody always has to pay.

This has been one of the ones where I have been obvious man many times. Except….it is not taxable income for the current year anywhere i know of…

Thanks for once again bringing the U.S. Government into perspective.

It isn’t taxable income if it’s a Federal refund. It probably isn’t even taxable income to the Federal, if it’s a state refund. Obviousman, you got it wrong this time.

It is not taxable income in the current year. Families with kids (and only up to 3 count) can get EIC of over $3000. (The pittance EIC is for singles and those who are actually working profitable jobs.)

When I was a kid, before money was invented, banks offered a “Christmas Club” account, wherein you could save money all year, supposedly so you would have a bit to spend for Christmas. Didn’t pay a penny of interest, it was just a “convenience”. Yeah, convenient for the bank. I wonder how much money they made on that little scam…

Well, either it is something.

maybe everyone in america starts suing the irs just like the scientologists. they sued everyone at irs, from the head to the agents.

My understanding is that, while STATE tax refunds are taxable on next year’s FEDERAL return, your Federal tax refund is not subject to federal income tax.

See http://www.irs.gov/publications/p17/ch12.html

“Refunds of federal income taxes are not included in your income because they are never allowed as a deduction from income.”

Well, if you didn’t read between the lines, I never used this type of account, ever.Why “loan” a bank money?If thousands or millions did use this type of account (it was a national fad), then the banks had access to a very large sum of money. That, as you know, allowed them to make even more money, because they paid no interest. The admin fees would have been the same on a typical interest bearing savings account.How long ago? I’m talking about the 50s and 60s.

Assuming the strip refers to state tax refunds being federally taxable (if you itemize deductions this year, that is), it is because the federal government gave YOU a tax-free loan of the taxable part of the refund amount, since you deducted the amount of the refund as “state tax paid”

Wiley:FYI – Arcamax is cropping the top and bottom of today’s strip:

http://www.arcamax.com/newspics/cache/w600/114/11493/1149312.jpg

I got a nice refund this year, and I got a refund for winning a challenge for a blatantly wrong parking ticket Woo Hoo !

@RepprEconomic ignorance abounds in Obviousman. As others have already said, the federal income tax refund is NOT taxable income. State income tax refunds are taxable income if the gross amount paid to that state was taken as a deduction the prior year. I live in a no income tax state, and I am so glad I don’t have to worry about that runaround.

Technically, Obviousman is wrong here. This refund is not considered income for this year, as it has already been counted as income for last year. What he should have said was it was a no-interest savings account.

I don’t think anyone here understands that a “refund” is simply a return of the extra money you had withheld. . . .your taxable income includes what was withheld, so it only means you “paid” too much.

Flat dollar tax as in flat dollar amount, not flat percentage. That’s what’s rational and fair.

Please clarify "flat dollar tax as in flat dollar amount … that’s what’s rational and fair. Federal expenditures in 2014 were approximately 3.9 trillion dollars, with a population slightly under 320 million..So, the federal government in 2014 spent a little over $12,000 per person. Are you suggesting it would be “rational and fair” for a family of four with Mom and Dad each making $35,000 per year to have paid as a family $48,000 in federal income tax (68.6% of gross), while a couple with each spouse earning $180,000 as an attorney, would pay as a couple $24,000 in federal income tax (6.6% of gross)?

BillWa: Flat tax equally takes 1% of the billionaire’s pocket change and 50% of the working poor’s survival. The only thing more regressive is a capitation tax (proposed by a certain female PM and partially exists in the GOP reintroduced poll tax) of taxing everyone the same identical amount.

Federal income tax refunds aren’t taxable. Not so obvious, man, eh?