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Tag Archive | "Earned income tax credit"

IRS has $760 Million in unclaimed refunds for 2010


 

 

WASHINGTON — Refunds totaling almost $760 million may be waiting for an estimated 918,600 taxpayers who did not file a federal income tax return for 2010, the Internal Revenue Service announced today. However, to collect the money, a return for 2010 must be filed with the IRS no later than Tuesday, April 15, 2014.

“The window is quickly closing for people who are owed refunds from 2010 who haven’t filed a tax return,” said IRS Commissioner John Koskinen. “We encourage students, part-time workers and others who haven’t filed for 2010 to look into this before time runs out on April 15.”

The IRS estimates that half the potential refunds for 2010 are more than $571.

Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.

For 2010 returns, the window closes on April 15, 2014. The law requires that the return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return qualifying for a refund.

The IRS reminds taxpayers seeking a 2010 refund that their checks may be held if they have not filed tax returns for 2011 and 2012. In addition, the refund will be applied to any amounts still owed to the IRS or their state tax agency, and may be used to offset unpaid child support or past due federal debts such as student loans.

By failing to file a return, people stand to lose more than just their refund of taxes withheld or paid during 2010. In addition, many low-and-moderate income workers may not have claimed the Earned Income Tax Credit (EITC). For 2010, the credit is worth as much as $5,666. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2010 were:

• $43,352 ($48,362 if married filing jointly) for those with three or more qualifying children;

• $40,363 ($45,373 if married filing jointly) for people with two qualifying children;

• $35,535 ($40,545 if married filing jointly) for those with one qualifying child;

• and $13,460 ($18,470 if married filing jointly) for people without qualifying children.

Current and prior year tax forms and instructions are available on the Forms and Publications page of IRS.gov or by calling toll-free 800-TAX-FORM (800-829-3676). Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for 2010, 2011 or 2012 should request copies from their employer, bank or other payer.

If these efforts are unsuccessful, taxpayers can get a free transcript showing information from these year-end documents by going to IRS.gov. Taxpayers can also file Form 4506-T to request a transcript of their tax return.

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Earned income tax credit gives workers a boost


For nearly 40 years, the Earned Income Tax Credit has been helping low- to moderate-income workers by giving them a boost to their income. Four out of five eligible workers claim EITC, but the IRS wants every eligible worker to claim and get this credit.

Here are some things the IRS wants you to know about this important credit:

Review your eligibility. If you worked and earned under $51,567, you may be eligible for EITC. If your financial or family situation has changed, you should review the EITC eligibility rules. You might qualify for EITC this year even if you didn’t in the past. Workers who qualify for EITC must file a federal income tax return and specifically claim the credit to get it, even if they do not have a requirement to file a return.

Know the rules. Before claiming EITC, you need to understand the rules to be sure you qualify. It’s important to get it and get it right. There are several factors to consider:

Your filing status can’t be Married Filing Separately.

You must have a valid Social Security number for yourself, your spouse if married, and any qualifying child listed on your tax return.

You must have earned income. Earned income includes earnings such as wages, self-employment and farm income.

You may be married or single, with or without children to qualify. If you don’t have children, you must also meet age, residency and dependency rules.

If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply.

Lower your tax or get a refund. The EITC reduces your federal tax and could result in a refund. If you qualify, the credit could be worth up to $6,044. The average credit was $2,355 last year.

Use free services. Don’t guess about your EITC eligibility. Use the EITC Assistant tool on IRS.gov. The tool helps you find out if you qualify and will estimate the amount of your EITC. The best way to file your return to claim EITC is to use IRS Free File.  Free brand-name software will figure your taxes and EITC for you. Combining e-file with direct deposit is the fastest and safest way to get your refund. Free File is available exclusively on IRS.gov/freefile. Free help preparing and e-filing your return to claim your EITC is also available at thousands of Volunteer Income Tax Assistance sites around the country.

If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply.  For more information, see IRS Publication 596, Earned Income Credit. It’s available in English and Spanish on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources: Schedule EIC

 

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Earned income tax credit


The Internal Revenue Service and community partners nationwide have launched their annual outreach campaign aimed at helping millions of Americans who earned $49,078 or less take advantage of the Earned Income Tax Credit (EITC).

The outreach campaign is necessary because one-third of the eligible population changes annually as their financial, marital and parental statuses change. Although an estimated four out of five eligible workers and families get the credit, one in five still miss out on it, either because they don’t claim it, or don’t file a return at all.

“The EITC provides a financial boost for millions of hard-working Americans. But people can easily overlook this important credit, especially if their financial situation has changed. The IRS reminds taxpayers to look into this valuable credit to see if they qualify,” said IRS Commissioner Doug Shulman.

The EITC varies by income, family size and filing status. People can see if they qualify by visiting IRS.gov and answering a few questions using the EITC Assistant. In tax year 2010, almost 26.8 million eligible workers and families received over $59.5 billion total in EITC. The average EITC amount last year was around $2,200.

Workers who earned $49,078 or less from wages, self-employment or farm income last year could receive larger refunds if they qualify for the EITC. That could mean up to $464 in EITC for people without children, and a maximum credit of up to $5,751 for those with three or more qualifying children. Unlike most deductions and credits, the EITC is refundable. In other words, eligible people may get a refund from the IRS even if they owe no tax.

How to Claim the EITC

To get the EITC, workers must file a tax return, even if they are not required to file, and specifically claim the credit. Those eligible for the EITC have free options to file a tax return to claim the credit:

Free File on IRS.gov: Free brand-name tax software walks people through a question and answer format to help them prepare their returns and claim every credit and deduction for which they are eligible. The program also allows people to file electronically for free, giving them access to all their money often in as little as ten days.

Free tax preparation sites: EITC-eligible workers can seek free tax preparation at more than 12,000 Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites. To locate the nearest VITA site, people can call the IRS at 800-906-9887. Taxpayers can also find VITA/TCE sites by calling their community’s 211 or 311 line for local services.

IRS Taxpayer Assistance Centers: EITC-eligible workers can seek free assistance in IRS locations across the country. Locations are listed online at www.IRS.gov. Hours and services offered vary by location and should be checked before visiting.

More information on EITC and detailed eligibility rules are available at www.irs.gov/eitc.

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