Basics Of The Low Income Tax Credit

Individuals and especially families who do not earn a lot of money may be eligible for a low income tax credit. This type of credit takes some of the strain off working families by maximizing their refund. One of the most widely used federal credits is the EIC or earned income credit. It is available for many employed families with children. You do not have to have children to benefit from this tax credit, however this will increase your likelihood of qualifying for the EITC.

In order to receive the earned income tax credit, you must not exceed certain income levels for based upon the size of your family. Also, you and your qualifying children must have resided in the United States for the entire year. In order to receive the EIC, you must have been employed at some point throughout the year and earned income. Self employment is counted under this tax credit. To claim the Earned Income Tax credit, your filing status cannot be married filing separately. You may file as single or married filing jointly.

If you have questions about the EITC, speak with the IRS or a tax professional. In some cases there are special modifications to the policy, for disaster victims, clergy members, military personnel and the disabled. Another tax credit that can help low income families is the child tax credit. This credit gives you a certain amount of money for each qualifying child, who must have lived with the parent filing for the credit more than 49 percent of the year. The child tax credit also has upper income limits so if your income exceeds a certain amount you would not be eligible for this credit.

You may also be able to receive low income housing tax credits if you go through HUD for housing. Ask your tax preparer about credits for low income families and individuals, there may be some you are not aware of. If you send your child to daycare while you work, this may qualify you for a Child and Dependent Care Expenses credit. There are quite a few low income tax credit breaks for those who meet certain financial criteria. It is imperative that the tax forms be filled out properly, so it is advised to use the services of a professional especially if you are expecting a refund and their fee can be automatically deducted.

 

 

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Federal Tax Table News:

 

GOP not prepared to cut federal debt - Arizona Republic

Daily Beast
GOP not prepared to cut federal debt
Arizona Republic
Santorum proposes to lower rates but narrow the base by tripling the exemption for dependent children. Along with other tax proposals, the Tax Policy Center estimates that the Santorum plan would reduce federal revenues by $900 billion a year.
Can Careful Mitt Romney Go Bold on Taxes at the CNN Debate?Daily Beast
Where Gingrich, Paul, Romney and Santorum stand on key issuesDetroit Free Press
The Huffington Post | Jon Ward | February 21, 2012Huffington Post
Washington Post (blog) -Atlanta Journal Constitution (blog) -MSN Money
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Learn income-tax changes to avoid leaving money on the table
A user's guide to federal income taxes, with new forms and revised deductions this year...


Obama: Slash corporate tax breaks - CNN

Obama: Slash corporate tax breaks
CNN
President Obama would also seek to ensure that the effective tax rate paid by manufacturers does not exceed 25%. A company's effective tax rate is generally the net amount it pays in federal taxes as a percentage of its income.

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Corporate pension plans ready to seek more relief - Pensions & Investments

Pensions & Investments
Corporate pension plans ready to seek more relief
Pensions & Investments
25, Federal Reserve officials announced their decision to keep the federal funds rate at what they acknowledged are EURexceptionally low levelsEUR of zero to 0.25% at least through late 2014. The prospect of three more years of flat federal fund rates has .

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County: Eligible residents in Morristown, Hanover area should apply for earned income tax credit
MORRISTOWN - The Morris County Department of Human Services and the Board of Freeholders have joined with the New Jersey Department of Human Services in urging eligible county residents to claim the E..


You're not paying the tax rate you think you are - Reuters Blogs (blog)

Reuters Blogs (blog)
You're not paying the tax rate you think you are
Reuters Blogs (blog)
. your federal income tax burden is probably lighter than you think. The portion of your income that you pay in taxes is your EUReffective tax rate.EUR But when politicians and pundits talk about effective tax rates, the data they typically use relies on .
Income tax cut the jolt Ga. needsAtlanta Journal Constitution

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