Business & Finance Taxes

Does It Mean That I Won't Get a Refund if I Can No Longer Get an EIC on My Tax Return?

    About the Earned Income Credit

    • The EIC was created to help low- and medium-income earners receive a tax credit or refund to offset the impact Social Security withholdings make on earnings during the work year. To be eligible for the EIC, you must meet several different IRS requirements. Different requirements exist for those with children and those without. As a worker without a child, you must have lived in the U.S. for over half the tax year, you or your spouse must be older than 25 and less than 65 when you file a joint return, and neither you or your spouse can qualify as a dependent on another person's tax return. When you have a child, the child must meet relationship, residency, age and filing status tests established by the IRS. When you are eligible for the EIC, it is either applied to the taxes you owe or sent to you in the form of a refund.

    Tax Deductions and Credits

    • Tax deductions and credits allow you to reduce your taxable income or reduce the amount of income tax you owe at the end of the year. The EIC is a refundable tax credit but not all credits are. Some credits only reduce your tax burden to a certain level. For example, recent tax credits for homeowners improving energy efficiency were for set amounts of money, such as $300 or valued at 10 percent of the improvement cost up to a maximum of $500.

    The EIC and other Tax Credits

    • When you are unable to claim the EIC, other credits and deductions remain open to you. If you run a small business, you can deduct your business expenses to reduce your income. You and your spouse remain exemptions. You can claim your children as exemptions and, potentially, qualify for a Child Tax Credit and Additional Child Tax Credit based on your income. A tax accountant or tax software can help you determine which credits and deductions you qualify for.

    Overpayments

    • Even if you find that you are not eligible for any additional deductions or credits, you can count yourself as an exemption on your tax return. If the taxes held out of your paycheck or paid into your self-employment tax account with the IRS are held out properly, you should be very close to perfectly meeting your income tax liability. You may have to pay a small sum to the IRS or you may be entitled to a small refund. Even if you do not qualify for the EIC, your overpayment of income taxes will be returned to you when you file your return.

SHARE
RELATED POSTS on "Business & Finance"
Five Lethal Bloopers Taxpayers Make
Five Lethal Bloopers Taxpayers Make
How to Organize Your Tax Documents
How to Organize Your Tax Documents
What Happens if I Didn't File My Taxes Last Year?
What Happens if I Didn't File My Taxes Last Year?
Easy Guide to Making the Most of Your ISA Allowance
Easy Guide to Making the Most of Your ISA Allowance
A Plan For Making Tax Preparation Less Painful
A Plan For Making Tax Preparation Less Painful
Are PSHCP Premiums Tax Deductible?
Are PSHCP Premiums Tax Deductible?
About IRS Income Tax Deductions
About IRS Income Tax Deductions
Tax Planning For Both Domestic And International Transactions
Tax Planning For Both Domestic And International Transactions
How to Cash a Joint Income Tax Return Check
How to Cash a Joint Income Tax Return Check
What Happens to Delinquent Property Taxes When the Owner Dies?
What Happens to Delinquent Property Taxes When the Owner Dies?
How to Search for an Applicant's DEA Number
How to Search for an Applicant's DEA Number
How to Report Income From Teaching Childbirth Classes
How to Report Income From Teaching Childbirth Classes
Tax Tips: Dealing With Partnership Income
Tax Tips: Dealing With Partnership Income
Calculation of the Alternative Minimum Tax - Property Taxes
Calculation of the Alternative Minimum Tax - Property Taxes
Seeking Help Of Property Tax Attorney And Valuation Tax Attorney In Texas
Seeking Help Of Property Tax Attorney And Valuation Tax Attorney In Texas
Tax Attorneys to Guide You in the Right Path
Tax Attorneys to Guide You in the Right Path
The Best Tax Free Investment
The Best Tax Free Investment
IRS tax relief- if you cannot pay your tax debt
IRS tax relief- if you cannot pay your tax debt
Can You Be Claimed as a Dependent for Tax Returns if You Are 18 Years and Above?
Can You Be Claimed as a Dependent for Tax Returns if You Are 18 Years and Above?
Mast Cell Tumors In Dogs - Know Your Dog\' s Lumps And Bumps
Mast Cell Tumors In Dogs - Know Your Dog\' s Lumps And Bumps

Leave Your Reply

*