Thursday, February 9, 2023

Overheard at Table 3: Helping Daughter with Taxes

Daughter: Thanks again for helping me with my taxes.

Dad: Of course.

Daughter: But I was wondering about that Student Loan interest thing.  Why didn't I get all the interest back?

Dad: Because they only give you a portion of it, not all of it.

Daughter: And why didn't I get the whole portion?

Dad: Because it's not an actual refund.  It just lowers the amount of income that you have to pay taxes on.

Daughter: So, I wouldn't gave gotten anything back if I hadn't paid my school loans?

Dad: Hold on, let me calculate ... [pulls out phone, looks up tax schedules]  OK, just roughing it here, looks like this: IF you had not made any student loan payments, you would have owed $12 in taxes, but since you DID pay student loans, that got you to a point where the government gave you BACK $450.

Daughter: That's pretty cool.

Dad: So whenever you hear anything blathering on about how mean government is, just remember that there are things that government does to try to cut you a break.

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