Common errors in tax filing that you can avoid easily by paying attention to detail and using available software tools.
earned income credit
Get Your Kids to Help You With Your Taxes
Sometimes as parents we get overwhelmed with the costs of raising kids. What with the high cost of soccer camp, video games, and lessons on the clarinet, it can be woefully expensive raising kids. Sometimes though, there are surprising ways that kids can help out with costs – and your income taxes is one of those places where having kids does help. The IRS recently published their Tax Tip 2014-11 which lists eight ways that having children can help to lower your taxes. The actual text of Tax Tip 2014-11 follows: Eight Tax Savers for Parents Your children may help you qualify for valuable tax benefits. Here are eight tax benefits parents should look out for when filing their federal tax returns this year. Dependents. In most cases, you can claim your child as a dependent. This applies even if your child was born any time in 2013. for more […]
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What Changed About the Earned Income Credit?
Image by didbygraham via Flickr I’ve received a lot of questions about this. Apparently as folks file their returns for the year, they are finding a difference in the amount of refund that they are due to receive this year versus last year. And as they look for answers, they often focus on the Earned Income Credit (EIC) and wonder if something changed. The answer is – very little changed. Certainly nothing that would have a significant impact on your income tax refund. There was one significant change, in that beginning in 2011 there was no advance payment of the EIC – in years past it was an option available for the taxpayer to receive his or her EIC in advance payments throughout the year rather than waiting until the tax return has been filed. Beginning with 2011, you have to wait to receive the EIC payment. Other than that, […]
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Earned Income Credit and Due Diligence
Image via Wikipedia For those familiar with the Earned Income Tax Credit (EITC), you (hopefully) are familiar with the preparer’s due diligence checklist. This is a checklist that the preparer uses to help determine if the taxpayer’s circumstances are in keeping with the conditions that are required to be met in order to be eligible for the credit. In the past, this checklist has been filled out by the preparer and kept in the preparer’s files. Recently this fact has changed a bit – the IRS changed the requirements, such that now the due diligence checklist must be filed along with the return. This filing requirement is the only thing that has changed, the due diligence is the same as before. The checklist Here’s what the checklist asks: Is the taxpayer’s status Married Filing Separately? (if this question is answered “Yes”, the taxpayer is not allowed to file for EITC) […]
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Tax Benefits For Parents
As parents, we spend a lot of money raising our children – from basic needs such as food, housing, doctor bills, and clothing, to education, daycare, soccer teams and lessons on the clarinet – it seems like the list is endless. Since the kids don’t generally pay you back (at least in dollars), the IRS steps in to help out. There are several tax benefits that you may be eligible for just because the little urchins are in your care… and here’s a list of ten tax benefits that the IRS has put together (taken from IRS Tax Tip 2011-18): Dependents In most cases, a child can be claimed as a dependent in the year they were born. For more information see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information. Child Tax Credit You may be able to take this credit on your tax return for each of your […]
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Earned Income Tax Credit 2011 Style
There have been a few changes to the Earned Income Tax Credit (EITC) for 2011 and years beyond. Some of these changes are pretty significant, others are more of the common variety. No More Advance Payments In the past, if a taxpayer was likely to be eligible to receive the EITC on filing his or her return, the law allowed the taxpayer to apply for and receive advance payment of a portion of the credit. This is because the credit is refundable – even if you don’t owe any tax on your tax return, you’ll get something back with the EITC. With the passage of the Education Jobs and Medicaid Assistance Act of 2010 signed into law August 10, 2010, the Advance payment of EITC was repealed, effective after December 31, 2010. Third-Child EITC The American Recovery and Reinvestment Act (ARRA) increased the EITC by 5% for families with three […]
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