Earned Income Tax Credit

As April 15th, tax day, approaches, are you filled with dread? Are you thinking that you don’t have enough money to meet your family’s need, so how can you meet your tax obligation? Things may be better that you think. If you are a low income working family or individual, you may qualify for a tax refund, even if you don’t make enough to pay taxes. The federal government may give you free money!!

The government may reduce your tax obligation or even pay you money if you qualify for the Earned Income Credit. If you made less than a certain amount of money in a given year, you may qualify for this tax credit. If you have children you may qualify for even more. Even if you don’t make enough to file a tax return, you may still qualify for the earned income tax credit and get a refund.

You may qualify for up to $4,400, if you are..

single and earned less than $11,750 single with one child and earned less than $31,030 single with 2 or more children and earned less than $35,263 married and earned less than $13,750 married with one child and earned less than $33.030 married with 2 or more children and earned less than $37,263

To qualify you need to have earned money and have a social security number. If you are married you must file jointly. If you have children, they need to qualify as well. The children need to be under 19 years old or if they are students, under 24. Children with permanent disability may be any age. Foster children and children that you have been financially responsible for may also qualify. The earned income credit is designed to help you financially. I think you should check this out, don’t you?

You can use the Free Tax Estimator provided by Turbo Tax Online to estimate your earned income credit. Prepare & File Taxes Online and get all the tax deductions and credits you deserve.

Posted by Michelle on Saturday, June 13, 2009 at 11:24 pm
Filed under Excise tax, Income Tax · Tagged with

Do You Make These 9 Common Income Tax Mistakes?

Its income tax time again. With the April 15th Deadline fast approaching you need to beware of these 9 common income tax mistakes as stated by Intuit the makers of Turbo-Tax.

1 - Not taking all of your deductions.

The 2 most common deductions missed are charitable deductions and the home office deduction. Many people underestimate the value of clothes and other items given to charity. Many taxpayers who are legally entitled to the home office deduction fail to take it for fear of being audited

2 – Not accounting for Reinvesting Mutual fund Dividends

Buying extra shares with reinvested dividends can affect your cost basis when you sell. Many taxpayers overpay the IRS because they don’t adjust the tax basis.

3 – Not claiming carryover items.

The two most common carryover many taxpayers miss are state and local income taxes paid with the prior year return and carryover capital losses.

4 – Not naming a beneficiary or naming wrong Beneficiaries to your IRA, 401k or other retirement plan.

If you fail to name a beneficiary then the money passes to your estate with unwanted tax consequences to your heirs.

5 – Not taking advantage of Matching employer contributions.

Many employees fail to invest in company sponsored retirement plans and loose out on matching contributions

6 – Failure to make estimated Quarterly Tax Payments.

Self Employed taxpayers are required to pay estimated quarterly payments to the IRS. Failure to do so may cause and underpayment penalty

7 – Poor planning in exercising stock options.

Taxpayers who exercise stock options then sell the underlying stock fail to anticipate and set aside money to pay the capital gains tax

8 – Not adjusting withholding when you change Jobs.

Taxpayers who change jobs for more money don’t always adjust their withholding to account for the higher pay and tax burden that goes with it.

9 - Contributing to a Roth IRA when your Income is too high.

Single taxpayers who earn over $110,000 or married Taxpayers who earn over $160,000 cannot contribute to a Roth IRA.

About the Author
Mike BigMak Makler Offers Financial Services (Life Insurance, Annuities and Mortgage Protection) in Florissant Missouri which is in North St. Louis County Missouri Just Across the Bridge from St. Charles Missouri and Alton IL

Call Mike at 314 398-5547