Countless hard working people may be missing the Earned Income Tax Credit or EITC that might be able to add an additional $5,600 or more to their pocketbooks. This tax credit as the name implies, is for an individual who works but doesn't make a great deal of money. The tax credit began in 1975 to help offset Social Security taxes and to provide an incentive for work. It is one of the Federal government's largest benefit programs for working individuals and families. Every dollar saved is a dollar earned, has significantly greater meaning, in today's economy. For this reason,tax payers should not miss out on this important tax credit.
To Qualify for The Earned Income Tax Credit - To qualify for the The Earned Income Tax Credit you must meet all of the income, age, dependency and citizenship requirements. If you are married, you must file jointly, since the earned income credit does not apply to persons who are married, but file separately. In addition, investment income cannot exceed $3,100 for 2009.
Many people will qualify for the the Earned Income Tax Credit for the first time this year, because their income declined, which might have resulted from pay cuts or unfortunately, a loss of a job, or reduced employer workload. It may also be applicable to those individuals who changed their marital status or had more children during the year.
Families with three or more children can receive a larger credit this year as compared to last year. The reason for this increase is attributable to the American Recovery and Reinvestment Act, which temporarily provides an increase in the earned income tax credit for taxpayers with three or more qualifying children. This tax legislation was signed in 2009 and therefore, the changes apply to 2009 when you file your tax return in early 2010. The maximum Earned Income Tax Credit for this new category is $5,657.
By filing your federal tax returns is the only way that eligible taxpayers can receive the Earned Income Tax Credit . Tax Tip- If you are not required to file an income tax return, because you tax liability is zero, you should consider filing a tax return this year to claim this credit, providing you are eligible for Earned Income Tax Credit.
The Amounts of the Earned Income Tax Credit - The following indicates the levels of tax credit that may be available to you. Providing you are married with 3 children with an income from $12,570-$21,420 you may be eligible for the maximum credit of $5,657. The maximum credit for 2009 is:(i)$5,657 with three or more qualifying children (ii)5,028 with two qualifying children (iii)$3,043 with one qualifying child and (iv)$457 with no qualifying children.
The Internal Revenue Service estimates that an additional 20% to 25% of taxpayers may qualify for EITC but may not be aware of it. Tax Tip - This information is very important and is worth repeating for those taxpayers who prepare their own tax returns. The EITC is a refundable credit, i.e., if the EITC reduces your taxable income below zero you are eligible to receive a tax refund for that amount.
This information is complex and you can learn more about the EITC from the Internal Revenue Service by asking for IRS publication 596. Tax laws are complex, change constantly and each situation is unique. This article is not intended to provide legal or accounting advice. The reader should perform his or her own due diligence and consult competent professionals in this area. - 31821
To Qualify for The Earned Income Tax Credit - To qualify for the The Earned Income Tax Credit you must meet all of the income, age, dependency and citizenship requirements. If you are married, you must file jointly, since the earned income credit does not apply to persons who are married, but file separately. In addition, investment income cannot exceed $3,100 for 2009.
Many people will qualify for the the Earned Income Tax Credit for the first time this year, because their income declined, which might have resulted from pay cuts or unfortunately, a loss of a job, or reduced employer workload. It may also be applicable to those individuals who changed their marital status or had more children during the year.
Families with three or more children can receive a larger credit this year as compared to last year. The reason for this increase is attributable to the American Recovery and Reinvestment Act, which temporarily provides an increase in the earned income tax credit for taxpayers with three or more qualifying children. This tax legislation was signed in 2009 and therefore, the changes apply to 2009 when you file your tax return in early 2010. The maximum Earned Income Tax Credit for this new category is $5,657.
By filing your federal tax returns is the only way that eligible taxpayers can receive the Earned Income Tax Credit . Tax Tip- If you are not required to file an income tax return, because you tax liability is zero, you should consider filing a tax return this year to claim this credit, providing you are eligible for Earned Income Tax Credit.
The Amounts of the Earned Income Tax Credit - The following indicates the levels of tax credit that may be available to you. Providing you are married with 3 children with an income from $12,570-$21,420 you may be eligible for the maximum credit of $5,657. The maximum credit for 2009 is:(i)$5,657 with three or more qualifying children (ii)5,028 with two qualifying children (iii)$3,043 with one qualifying child and (iv)$457 with no qualifying children.
The Internal Revenue Service estimates that an additional 20% to 25% of taxpayers may qualify for EITC but may not be aware of it. Tax Tip - This information is very important and is worth repeating for those taxpayers who prepare their own tax returns. The EITC is a refundable credit, i.e., if the EITC reduces your taxable income below zero you are eligible to receive a tax refund for that amount.
This information is complex and you can learn more about the EITC from the Internal Revenue Service by asking for IRS publication 596. Tax laws are complex, change constantly and each situation is unique. This article is not intended to provide legal or accounting advice. The reader should perform his or her own due diligence and consult competent professionals in this area. - 31821
About the Author:
Learn more about how we can help determine if you are eligible for the Earned Income Tax Credit and other available tax credits and about our competitively priced paperless and internet based approach to tax preparation at affordable prices. Sandor(Sandy) E. Lenner,CPA-MBA has been providing accounting services for over 35 years and works part-time at his wife's CPA firm.
