2017+ Chrysler Pacifica Minivan Forums banner

1 - 6 of 6 Posts

·
Registered
Joined
·
75 Posts
Discussion Starter #1
it must be a dumb question but it's important to me, sorry ...

so you get $7,500 off taxes you owe ...

is that off of taxes you owe at the end of the year if you didn't pay them during the year ...

or does this also apply to taxes that were already automatically deducted from your paycheck during the year ?

in other words if you paid let's say $10,000 in taxes during the year deducted from your paycheck but when you do taxes at the end of the year you don't owe anything else in addition to what you already paid ...

do you get anything for that PacHy ?
 

·
Registered
Joined
·
4 Posts
Your withholding does not change the fact that your tax burden was at least 7,500 during the year. In case your withholding was exactly the tax amount owed during the year, this 7,500 tax credit would get to you as a refund from the IRS :).
 

·
Registered
Joined
·
84 Posts
Yup - regardless of your withholding situation at work, if your tax obligation is more than $7500, you will get the full amount.
 

·
Registered
Joined
·
523 Posts
Yup, to answer your example, you would get a $7500 check back the following year.

If you hadn't withheld anything then you would owe $2500.
 

·
Registered
Joined
·
1,771 Posts
it must be a dumb question but it's important to me, sorry ...

so you get $7,500 off taxes you owe ...

is that off of taxes you owe at the end of the year if you didn't pay them during the year ...

or does this also apply to taxes that were already automatically deducted from your paycheck during the year ?

in other words if you paid let's say $10,000 in taxes during the year deducted from your paycheck but when you do taxes at the end of the year you don't owe anything else in addition to what you already paid ...

do you get anything for that PacHy ?
There is a line in the 1040 that says "total tax liability" or something similar. If it is above $7500 and you don't expect big changes in you finances this year- you'll get the full credit.
 

·
Registered
Joined
·
315 Posts
Just to add to what others have said, it’s a tax credit. It covers the first $7,500 of your 2019 taxes, that you file in 2020. There’s nothing to do with withholding. This is about your tax obligation when you file. Your withholding happens so that you don’t get a financial shock when your taxes are due.

If your obligation to Uncle Sam is $7,500, the tax credit covers that for you. If your obligation is more, the tax credit covers the first $7,500 of it. If your obligation is $6,500, the credit only covers $6,500 for you.

Look at line 15 of your 1040. That’s your tax obligation for your most recent filing. If not much in your life changes, it’s reasonable to expect next year’s filing to be similar.
 
1 - 6 of 6 Posts
Top