Earned Income Tax Credit--Its Money The Government Wants To Give You
If You Qualify

Earned Income Tax Credit or EITC as the Internal Revenue calls it is a special tax credit the government has provided for low income and moderate income individuals. Another way of putting it is; money the government is give low income wage earners as a bonus for workinghard for a low income. This article outlines information you or your tax preparer will need in the preparation of your earned income tax credit. It will also help you and your tax preparer to understand what the process is.

• You must meet the following EITC requirements to receive the credit:
  
• Your must have a valid Social Security Number
  
• You must have earned income from employment or from self-employment.
  
• Your filing status cannot be married, filing separately.
  
• You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.
  
• You cannot be a qualifying child of another person.
  

You can qualify if you have no childred but, if you do not have a qualifying child, you must:

Be age 25 but under 65 at the end of the year,Live in the United States for more than half the year, Cannot qualify as a dependent of another personYou cannot file Form 2555 or 2555-EZ (related to foreign earn income)

EITC Thresholds and LimitationsSpecial rules may apply--Current Tax Year 2005

Earned income and adjusted gross income (AGI) must each be less than:
$35,263 ($37,263 married filing jointly) with two or more qualifying children;
$31,030 ($33,030 married filing jointly) with one qualifying child;
$11,750 ($13,750 married filing jointly) with no qualifying children.

Tax Year 2005 maximum credit (money that will be paid to you):
$4,400 with two or more qualifying children;
$2,662 with one qualifying child;
$399 with no qualifying children.
Investment income must be $2,700 or less for the year.

The Advance Earned Income Tax Credit (AEITC) for tax year 2005 maximum credit the employer is allowed to provide throughout the year with the employees pay is $1,597.

A "Qualifying Child? - A "qualifying child? may enable a taxpayer to claim several tax benefits, such as head of household filing status, the exemption for a dependent, the child tax credit, the child and dependent care credit and the earned income tax credit. Prior to 2005, each of these items defined a qualifying child differently.

If you have already filed for your taxes you will still be eligible for the Earned Income Tax Credit, your tax preparer can file an amendment for you.Print this information and give it to your tax preparer. She or he can get additional information at IRS.gov, including tax forms.

Tip: Be honest in your tax reporting, dishonesty can and will come back to haunt you years later.

You can qualify if you have no childred but, if you do not have a qualifying child, you must:
Be age 25 but under 65 at the end of the year,Live in the United States for more than half the year, Cannot qualify as a dependent of another personYou cannot file Form 2555 or 2555-EZ (related to foreign earn income)EITC Thresholds and LimitationsSpecial rules may apply--Current Tax Year 2005

Earned income and adjusted gross income (AGI) must each be less than:
$35,263 ($37,263 married filing jointly) with two or more qualifying children;
$31,030 ($33,030 married filing jointly) with one qualifying child;
$11,750 ($13,750 married filing jointly) with no qualifying children.

Tax Year 2005 maximum credit(money that will be paid to you):
$4,400 with two or more qualifying children;
$2,662 with one qualifying child;
$399 with no qualifying children.Investment income must be $2,700 or less for the year.

The Advance Earned Income Tax Credit (AEITC) for tax year 2005 maximum credit the employer is allowed to provide throughout the year with the employees pay is $1,597.

A "Qualifying Child? - A "qualifying child? may enable a taxpayer to claim several tax benefits, such as head of household filing status, the exemption for a dependent, the child tax credit, the child and dependent care credit and the earned income tax credit. Prior to 2005, each of these items defined a qualifying child differently.

If you have already filed for your taxes you will still be eligible for the Earned Income Tax Credit, your tax preparer can file an amendment for you.Print this information and give it to your tax preparer. She or he can get additional information at IRS.gov, including tax forms.

Tip: Be honest in your tax reporting, dishonesty can and will come back to haunt you years later.

http://www.msfinancialsavvy.com

"Helping women to create lives that are sane, manageable, and prosperous!