Sunday, December 26, 2010

Earned Income Tax Credit, A Poverty Reduction Program

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The Earned Income Credit (EIC) is available to taxpayers who fall into a low-income tax bracket established by the IRS. The earned income credit is usually a substantial amount and many benefit from a large refund.

You must meet the following requirements to be eligible for the EIC:

* You must be married and filing jointly, head of household, qualifying widow, or single. If married, you may not file separately.
* Qualifying children must be under 18, or full-time students.
* Household members must have valid Social Security numbers.
* You must be a U.S. Citizen.
* You must have earned income.
* You cannot be a qualifying child on someone else’s return.

If you meet the above requirements, look for one of the online calculators available through online tax preparation software sites that will calculate the amount you are eligible for. For example, TurboTax Online offers a free calculator.

The amount you are eligible for is determined by your income level and family size. The tax credit either increases your refund or reduces the amount of tax you owe.

EIC (Earned Income Credit) Table

# of Children Refund Amount Income Limits

* 0 $457 $13,460 ($18,470- Married filing jointly)
* 1 $3,050 $35,535 ($40,545 – Married filing jointly)
* 2 $5,036 $40,363 ($45,373 – Married filing jointly)
* 3 or more $5,666 $43,352 ($48,362 – Married filing jointly)

There is only one limitation: taxpayers with investment income of more than $3,100 do not qualify for the EIC (Earned Income Credit).

Software such as TurboTax offers answers and assistance to any questions you may have. A tax professional is available 24 hours a day, 7 days a week. All of this is offered free when filing your taxes.

For more information visit TurboTax Online. Use the free calculator to see if you qualify and to determine your earned income tax credit amount. App with Picture Caller ID!

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