|
Tony Robinson
Now, here's a real savings to the individual taxpayer with children. The child tax credit is a direct tax credit that is available to provide credit to taxpayers with income below certain established levels.
The maximum credit per child is $1000 and is first applied to reduce or eliminate the taxpayer's tax liability. How does this tax credit work, and does everyone qualify? Well, let's start with the last question first. Yes, everyone with children qualifies, however the tax credit phases out when income is above $110,000 for married filing jointly, $75,000 for single, head of household, or widow, and $55,000 for married filing separately.
-------------------------------------------
Now, to answer the "how does it work" aspect; the best approach might be to simply break down the requirements, and explain each fully. The child tax credit is the responsibility of the Internal Revenue Service, and the credit issuance is determined through the tax returns the individual tax payer completes each year. Taxpayers must complete either the 1040 or the 1040A and the IRS from 8812. The IRS will then determine eligibility, and process accordingly; the requirements and limits change each year, so the individual's eligibility may change each year.
In order to qualify, a family must have earned at least $10,500 in income, and that figure will rise each year, according to inflation. During its original year of inception, many families with qualifying children were mailed an advance tax credit of either $300 or $400 dollars; but they were also told this would reduce their end-f-year tax credit, dollar for dollar.
The method used for determining the tax credit is fairly simple, and is not difficult to calculate; however, any individual taxpayer should seek the advice and assistance of a tax professional when preparing their tax return.
The credits, as stated earlier are claimed when you complete a 1040 or 1040A and file your returns with the IRS. Although many individual taxpayers pay for a professional to complete their returns each year, there are qualified preparers that are available free of charge each year, through the IRS; either way, make sure that you communicate your qualifications for the child tax credit, and check your return to see that the credit was applied. The child tax credit, along with the Hope and Lifetime Learning credits are a direct means to affect the individual taxpayer's tax liability and offer some level of tax relief. This is meant to help parents with the costs associated in raising children, and educating them. Most often, the child tax credit is a way to alleviate the existing tax liability for middle-income taxpayers. For the extremely low income families, there is often no tax due, so there is no allowable credit. Although it does not help the poverty level families as a form of tax refund or tax-free income, it does help to alleviate any tax liability. The Earned Income Credit is used by many poverty level or low-income families as a supplement to their earned income.
General Articles about Taxes
In the largest criminal tax case ever filed, KMPG has copped a plea to using fraudulent tax shelters to bilk the government out of 2.5 billion dollars. KMPG has agreed to pay a fine of $456 million dollars,... Due to the state's persistent cash and budget problems, the State Controller announced on Friday, January 16, 2009 that he will have to delay refunds for 30 days starting February 1, 2009 for Personal... We all love computers and the fact that it exists to make our jobs simpler. And they have invaded the field of taxation like never before.A multitude of tax deduction software is available in the market... Accounting is the recording, interpretation and reporting of financial transactions. Each and every business must keep proper record of all such transactions. There are several branches of accounting such... There are many websites on the Internet today that gives much needed income tax help for those who have no idea of what's going on during tax time. Income tax is a tax paid on income, unfortunately no... In 2010 the estate tax will be repealed and the gift tax rate will fall to 35%. However, this repeal is effective only for that year and the estate tax will be reinstated in some form the very next year... They say that there are two things that are inevitable in life: death and taxes. But even though these are both inevitable, there are ways to put off or limit the inevitable by using knowledge.If you are... Many small businesses complain when confronted with the expense of complying with the Americans with Disabilities Act. Most do not realize that there are a number of tax incentives available to offset...
Business Tax Articles of Interest
Four Reasons Not to Form a Limited Liability Company
by Stephen L. Nelson, CPA, MBA, MS-Taxation
Don't get me wrong. I think LLCs, or limited liability companies, are great. At modest cost, they often let you minimize your legal liability. LLCs also give you tremendous tax flexibility, because with... Many people are surprised to learn that the LLC business entity is a fairly recent phenomenon. Wyoming was the first state to legislate the creation of LLCs in 1977. Most states didn't jump on the LLC... CenterPoint-Solutions, LLC is pleased to announce the firms alliance with Greysone.Net, Inc. of Georgia, an organization that provides Internet and World Wide Web solutions and services for healthcare... A Limited Liability Company or LLC is a mixture between a partnership and a corporation. An LLC protects the owners from personal liability on the company's debts just like a corporation with the tax-benefits... Mid-State Swimming Pool Co., LLC has a new web site! The new site design includes helpful information about our line of fiberglass pools, vinyl pools, pool chemicals, pool supplies, new pool owner help,... LLC (limited liability company) provides the benefits of liability protection and pass through taxation features of sole proprietorship or partnership. Many small business owners prefer this form of corporation... A Limited Liability company (LLC) is the most commonly set up corporation these days. This type of incorporation is known as LLC incorporation. It is different from other types of incorporation of businesses... 1. Why should I incorporate / form an L.L.C. in Delaware?When forming a corporation or LLC, you should choose the state of incorporation carefully. This is your opportunity to forum shop for the law you... dmg management LLC Releases Statement of Separation From Big Tiggers Street Corner Foundation Washington, DC (July 18, 2005) -- dmg management LLC, a sports and entertainment marketing firm based in Washington,...
The articles, links or news items are for general information only. Their appearance on the web site does not mean the article, link or news is endorsed by the owner of the web site. Use this information at your own risk.
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|