Today TaxMama hears from Alex in the TaxQuips Forum who is confused. “I’m wondering what my refund would be if I claimed exempt status for about half of 2011.I’m a full-time student, filing as single, with a gross income of about $10,000. I tried doing some of my taxes on TurboTax, but it said my refund would only be my federal withholding. So my real question is – when you pay into Social Security and Medicare taxes, why don’t you receive those funds back?”
Your TurboTax computations said you only receive your federal withholding as a refund? That’s pretty good. That means you can expect to get back everything you paid in.
However, you want to know why you don’t get your Social Security and Medicare contributions back? That’s because it’s going to fund YOUR Social Security account for your retirement…uh, that is, if it’s still there when you get ready to retire. If not, well, it’s going to fund mine, when I eventually start collecting.
In the meantime, before you file your tax return, consider waiting a little and do a little more reading about what else you might be entitled to get. If you were a student last year, you might have some education credits available to you. If you fund an IRA or contributed to your retirement account at work, you might have a retirement saver’s credit due to you.
Incidentally, if you are under age 24, you must check with your parents before you file your tax return. You might still be a dependent on their tax return. That means you would lose your personal exemption – and that might change your refund amount.
And remember, you can find answers to all kinds of questions about refunds and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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