Quote:
Originally Posted by Mephistopheles Janx
As I understand it... unless I owe $7500 at the end of the year, I'm not seeing $7500. If I so happen to get a return at the end of the year (which I usually do)... that $7500 turns into 0.
Please correct me if I'm wrong here.
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You're wrong...kind of. It's a credit on your TAX LIABILITY, not your TAX REFUND. You pay taxes through the whole year through your paychecks, and that's what matters. The refund just settles up. To confirm, just look at your filed return to see what your "total tax" was (line 24 if you file a 1040). It will depend on your income, but if you're above ~$70k or so (for a household if that applies), you'll get all of it.
So to clarify with a specific example, I "owed" about $1500 when I filed my taxes this year, but I got the credit since my tax was much higher than that. In the end, they refunded me $6k.