When tax season rolls around it is common for individuals to want to take advantage of as many tax credits as possible. One of the commonly used tax credit is known as the EITC/EIC, which is a tax credit for taxpayers who do not make a lot of money. Today, this article is going to discuss the basics of the Earned Income Tax Credit.
Why Was the EITC Created?
According to the IRS, the EITC was created to help taxpayers keep more of the money that they earned. It is designed for taxpayers who made less than $51,567. Many taxpayers qualify for this credit yet all of them do not take it because they are either unaware of the credit or they do not know the income limits and do not think they qualify.
How Much Is The EITC?
The amount that you will receive for the EITC varies based on your filing status and whether or not you are claiming qualified children or dependents. You do not have to claim a qualifying child or dependent to receive the tax credit however those who do receive more money.
How to Know if You Are Eligible
If you go to a professional tax preparer, they will tell you whether you are eligible for the tax credit. If you use tax software, such as Turbo Tax, it will ask you a series of questions to determine if you are eligible to claim the credit. If you do a paper return, you can go to the IRS official website and use their EITC Assistance to find out whether or not you can claim the ETIC.
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