Do you know what due diligence is for claiming credits on your income tax return? If you use a preparer, you can bet he or she does.
EITC
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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Tax Credits That Can Increase Your Refund
The IRS recently issued their Tax Tip 2012-41, which lists out some of the tax credits that are refundable. Most tax credits are not refundable, meaning that if the amount of the credit is more than your tax for the year, the credit is limited only to the amount of your tax. For example, if you had tax payable of $1,500 and then had Education Credits, Energy Credits, and/or Foreign Tax Credits amounting to more than $1,500. Your credits will be limited to $1,500 since that’s your tax payable and the credits are not refundable. On the other hand, there are a few credits that are refundable, as listed below in the actual text from Tax Tip 2012-41. Four Tax Credits that Can Boost Your Refund A tax credit is a dollar-for-dollar reduction of taxes owed. Some tax credits are refundable meaning if you are eligible and claim one, you […]
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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 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 […]
Sterling Raskie, MSFS, CFP®, ChFC®
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