I've got about two more weeks of busy season and then things should die down and be more manageable.
March is a slow month for tax season. We get our peak in late January into early February. That's because all the big refund people come as soon as they get their W-2's. People don't realize how much wealth re-distribution that goes on during tax season. I never realized it until I got into my tax business.
That wealth redistribution is what makes the tax business so lucrative. With the Earned Income Credit, a family of four can make around $20,000. Someone like your average construction worker. The guy could have zero dollars withheld for taxes. He would still get somewhere in the neighborhood of $6500 in a refund. How?
Two refundable credits:
1. Earned Income Credit - around $4500
2. Add'l Child Tax Credit - $2,000
That's like receiving a 32% Annual Bonus check from the Government. Imagine getting 32% of your annual income as a tax rebate check.
Give the guy some credit, because he is paying his Social Security and Medicare Taxes which are in the neighborhood of $1500. But even if you net the two, he's not doing bad with a $4,000 refund, which is more like 20% of his annual income.
But if the tax business is that lucrative, why is it that I still find myself as the one getting my annual bonus checks?