Thursday, August 2nd, 2012. 2 views.
The Earned Income Tax Credit is a financial boost for workers earning $49, 078 or less within 2011. Four of five qualified taxpayers filed for as well as received their EITC last year. The IRS wants you to definitely get what you earned also, if you are qualified.
Here are the top ten things the IRS wants you to definitely know about this useful credit, which has been producing the lives of employees a little easier since 1975.
1. As your financial, marital or parental situations change from year to year, you should review the actual EITC eligibility rules to find out whether you qualify. Just because you didn?t qualify last year doesn?t mean you won?t this year.
2. If you qualify, the credit could be worth as much as $5, 751. EITC not only decreases the federal tax you owe, but could result inside a refund. The amount of your EITC is based on your earned income and whether there are qualifying children inside your household. The average credit was around $2, 240 last year.
3. If you are eligible for EITC, you must file a federal tax return and specifically declare the credit ? even though you are not otherwise necessary to file. Remember to include Schedule EIC, Earned Income Credit whenever you file your Form 1040 or, if you file Type 1040A, use and retain the actual EIC worksheet.
4. You do not be eligible for an EITC if your submitting status is Married Filing Separately.
5. You must have a valid Social Security number for yourself, your spouse ? if filing a joint return ? and any qualifying child listed on Schedule EIC.
6. You must have earned income. You have earned income should you work for someone that pays you wages, you are self-employed, you have income through farming, or ? in some cases ? you receive disability income.
7. Married couples and single people without children may qualify. If you do not have qualifying children, you must also satisfy the age and residency requirements, as well as addiction rules.
8. Special rules apply to members from the U. S. Armed Forces in combat zones. Members of the military can elect to include their nontaxable combat spend in earned income for the EITC. If you make this election, the combat pay continues to be nontaxable.
9. It?s easy to figure out whether you qualify. The EITC Assistant, an interactive tool available on the IRS website, removes the guesswork from eligibility rules. Just answer a few simple questions to find out if you qualify and estimate the quantity of your EITC.
10. Free help is available at Volunteer Income Tax Assistance sites that will help you prepare and claim your own EITC. If you are preparing your taxes electronically, the software will figure the credit for you. To find a VITA site near you, visit the IRS. gov website.
Source: Internal Revenue Service
We are CPA in Philadelphia and we provide accounting and tax return preparation to small business owners in Philadelphia. To contact us, please visit our website at www.excellencetaxservices.com/cpaip.html.
CPA in Philadelphia
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