Millions of workers can take credit

With all the hoopla about the one-time rebates that most taxpayers will receive starting in May, it might be easy to overlook a valuable tax benefit for workers with modest incomes.

It’s available tax year in and tax year out, and could reduce or even eliminate any federal income taxes they owe. For some folks, it even provides a refund of hundreds of dollars. You know, just like the much-talked-about rebates will do.

This tax benefit has a name that’s hard to remember and requirements that are a challenge to understand: the Earned Income Tax Credit.

But its value to certain families is undeniable.

For example, a single working mother with young children who earned less than $37,783 in 2007 could qualify for a credit of as much as $4,716. For detailed information, check out this article on the Earned Income Credit.

To qualify, you must be between the ages of 25 and 65 and you must have income from working that is less than:

• $12,590 if single, $14,590 if married with no children
• $33,241 if single, $35,241 if married, with one child
• $37,783 if single, $39,783 if married, with two or more children

The maximum credits available:

• $428 for taxpayers with no children
• $2,853 for taxpayers with one child
• $4,716 for taxpayers with more than one child

If you take the credit, you’ll have lots of company. More than 22.4 million taxpayers shared in $43.7 billion dollars in Earned Income Credits in 2007. Those who took the credit accounted for 18 percent of the 124 million tax returns filed.

Even so, the IRS estimates that 20 to 25 percent of those eligible for the credit don’t claim it. That’s at least 5.6 million people missing out on hundreds of dollars each tax season.

For those who qualify, TurboTax offers free tax-preparation software and e-filing for federal tax returns and for certain state returns. Visit this site for more information or to get started.

In 2008, many workers who qualify for the credit should be doubly rewarded for filing a tax return. First off, they’ll get their credits. And then, if they have earned income of more than $3,000, they could also qualify for a rebate of at least $300 per person or $600 per married couples and $300 per child. Good things can come to those who file.

Comments

I noticed that on 2006 and 2007 my loss carry forward somehow did not get into the tax form and caused me to pay more each year in taxes. Can I wait till next year when my income will be much less and then use income averaging?

[ricman]

where I can get 8453-OL form?

[ricman]

I am using turbotax for my tax filling. in my state tax, I see
M13 form showed up which said Income Extension payment. I did
not choose this form, why automatically this form come in my return?

Could someone explain to me why ?
thanks.

[Edward Hayhurst]

I had TurboTax download the information on my 1099 form directly by my financial institution. The amount appearing on TurboTax is exactly 2X of what is reported on the hard copy supplied by my brokerage firm.

My financial instituion syas this a s a common problem for TurboTax users but cannot heop me fix the problem. What can I do to get TurboTax to reflect the figure on my 1099?

[Angela Zeringue]

I am trying to download a copy of Turbotax Premier 2006. I used the online editiona and now need to file an amendment. When I go to my account there are no downloads available (although I do see s PDF copy of my tax return) Any suggestions?

[Margie]

Turbotax donated our kicker to education funds without our consent.

[Robert Carson]

Turbotax has an error in moving data from a K-1 form to schedule C and then the 1040. Their phone help is non existant.

[Albert S. Bowman]

Based upon you paid reciew, I received 4 entries that needed changed.
I was able to change entries 3 & 4 but was unable to change entries 1 & 2. Thes entries start off green and yellow then changed to red on white. Somehow I"m unable to activate the override. Help. A.S.B.

[Natalie Calabro]

I am retired, in my late eighties, and incapacitated.

Can I take a deduction or credit for energy efficient electric pumps which I need to keep the house warm?

Thank you.

[Anthony]

I have used Turbotax for several years. However for more than 3 years now I have been unable to use it for preparing my state return. I work out of state so none of my income is reported in my state of residence. The "earning" state has no personal income tax so I pay none there. Turbotax will not recognize the income and properly calculate my return for my state of residence.

[BILL MARSH]

YOUR HSA HANDLING IS STILL MESSED UP I AM OVER 60 AND MADE A CATCH UP CONTRI. YOU WANT TO GIVE IT BACK TO ME AS A $800 CR ACGAINST TAXES. AND IT KEEPS PUTTING MY HSA CONTRI INTO A MSA EMPLOYER INSURANCE CONTRI. WHAT IS GOING ON. THIS IS THE 2ND YR YOU HAVE NOT FIXED THE ISSUE. THIS MAY BE THE LAST YR