How do I get sales tax refunds from Italy?

Why do my wife's coworkers get large tax refunds and we don't?

• One of my wife's coworkers (with 4 kids, both parents working) just got a $10,000 tax refund. Another coworker (single with no kids) got $3,000. All three of these people and my wife earn about $25,000 each. I told my wife that we won't get much of a refund, if any, this year because we made a combined income of almost $60,000 and have only one child. She had about $700 withheld for federal taxes. I'm self employed and so I send in estimated taxes to the IRS. My wife can't understand how her coworkers can get such large tax returns (every year!) yet she and I don't. I use TurboTax to prepare our tax return. She said that I must not know how to prepare tax returns because if I did we would be getting large tax returns like her coworkers do. I explained to her that if a person doesn't claim enough exemptions on their W4, the employer will withhold an excessive amount. And the person will get that excess back in their refund. She said she was sure that not much was being withheld from her coworker who is single and childless. Yet he got a $3000 refund. I said that the guy must be cheating to get so much money back... much more than what was withheld from his paycheck. The only way I know for an average person to get such a large amount of free tax money is through an earned income tax credit. For someone without children, his income is way too high to qualify for an EITC. I explained that the couple with four kids could be getting quite a large amount due to the EITC on their larger number of kids. However, I just used the EITC calculator on irs.gov and found that their combined income was way too high to get the credit. If, however, they counted the income from only one parent, they would get almost $5000. They are not legally married and I'll bet that they exploited that fact to get the credit. None of these people, including my wife and I, are eligible for any of the other refundable tax credits, like for adoption or new homeowners. And we all rent, and so without the large deduction for mortgage interest payments, taking the standard deduction makes sense for all of us. (One thing I forget to mention to my wife is that there is a $1000 per child tax credit. I forgot about that because we just had our first child a couple years ago, so I've taken it only once, for 2010. Anyway, that would explain $4,000 of the $10,000 the couple got back.) If you can think of any way my wife's coworkers could be getting such large tax returns without having an excessive amount withheld and without cheating on their tax forms, please let me know. Frankly I'm a smart person and I know how to prepare a tax return form, especially when simply taking the standard deduction. What I'm hoping for here is that the answers to my question will persuade my wife that we're not losing $3k to $10k per year because I don't know how to prepare a tax return. OPTIONAL READING: For the record, I've done my own taxes every year for the last 25 years. When I owned a home, I itemized. Now that I rent, I take the standard deduction. And I've used TurboTax to do my business taxes since the program came out. (I can do it without TurboTax, but find the convenience of using the program worth its $80 price. Plus it reminds me when there are relevant changes in the tax code. And it tells me how to do unusual things like carrying a net operating loss forward or backward. Stuff like that.) Sorry for the long post.

• Answer:

  If the couple isn't legally married, then they can't file as married, must file as single (or one as HofH, one single) and ridiculous as it seems, would be eligible legally for EIC for the parent who claimed the kids - or split them each claiming two, and get even MORE EIC.. The single coworker with a child would have gotten EIC legally. But you are right, the one without kids wouldn't have gotten that much unless he either had way too much taken out, or lied about something. Even a $1000 refundable portion of AOC education credits wouldn't explain that large of a refund. By the way, if you didn't amend your 2009 return to get the forgotten child tax credit, you can still do it and get the money.