ok...
not sure how much background you want before the equations...
you would think the less income you have the less tax you pay equaling a greater refund
well the EIC - earned income credit throws a wrench in this formula
i've done 2 returns today that could potentially have Huge sch c losses...
but a sch c loss = no EIC
so it was actually in the clients favor to show a reasonable income from Sch c business to get the largest refund from the EIC
now my tax software isn't designed to determine what income gets the most refund
i've determined some formulas based on a particular clients info as the EIC is a table and flucuates based on filing status and # of children etc...
so here it is
EIC = Earned Income Credit
EIC,A = Earned Income Credit Amount (the number you enter into the IRS table)
I - Schedule C Income
SET = Self Employment Tax 15.3%
Refund = EIC - SET
EIC = EIC,A * .40
EIC,A = I - (.5 SET)
SET = I * .153
.5SET = I * .0765
can anyone figure this out?
not sure how much background you want before the equations...
you would think the less income you have the less tax you pay equaling a greater refund
well the EIC - earned income credit throws a wrench in this formula
i've done 2 returns today that could potentially have Huge sch c losses...
but a sch c loss = no EIC
so it was actually in the clients favor to show a reasonable income from Sch c business to get the largest refund from the EIC
now my tax software isn't designed to determine what income gets the most refund
i've determined some formulas based on a particular clients info as the EIC is a table and flucuates based on filing status and # of children etc...
so here it is
EIC = Earned Income Credit
EIC,A = Earned Income Credit Amount (the number you enter into the IRS table)
I - Schedule C Income
SET = Self Employment Tax 15.3%
Refund = EIC - SET
EIC = EIC,A * .40
EIC,A = I - (.5 SET)
SET = I * .153
.5SET = I * .0765
can anyone figure this out?