{"id":691,"date":"2016-07-10T19:25:47","date_gmt":"2016-07-10T19:25:47","guid":{"rendered":"http:\/\/onlyfordentists.com\/blog\/?p=691"},"modified":"2016-07-21T19:26:31","modified_gmt":"2016-07-21T19:26:31","slug":"all-about-the-earned-income-tax-credit","status":"publish","type":"post","link":"https:\/\/onlyfordentists.com\/blog\/2016\/07\/all-about-the-earned-income-tax-credit\/","title":{"rendered":"All About the Earned Income Tax Credit"},"content":{"rendered":"

Individuals who are working and who have low-to-moderate taxable income may qualify for this income tax credit.<\/em><\/strong><\/p>\n

When you think about ways to offset your income as you\u2019re preparing for income tax time, do you primarily consider the deductions you can take? Things like home mortgage interest, charitable donations, and taxes you paid that can be claimed?<\/p>\n

Allowable credits can also work in your favor. If you meet the Internal Revenue Service\u2019s seven criteria, you may be eligible for the Earned Income Tax Credit (sometimes called Earned Income Credit, or EIC).<\/p>\n

Note: As you read the rules that the IRS has established, keep in mind that, as with many of the agency\u2019s regulations, there can be exceptions. We can help you determine whether you are a candidate for this credit.<\/em><\/p>\n

If you can answer \u201cYes\u201d to these seven questions, you may be able to fill in and file a Schedule EIC:<\/p>\n

    \n
  1. Is your Adjusted Gross Income (AGI) less than the IRS\u2019s limits? For 2015, this is:<\/strong>
    \n\u00a0<\/strong><\/p>\n
      \n
    • 3+ qualifying children: $47,747 ($53,267 for married filing jointly)<\/li>\n
    • 2 qualifying children: $44,454 ($49,974 for married filing jointly)<\/li>\n
    • 1 qualifying child: $39,131 ($44,651 for married filing jointly)<\/li>\n
    • No qualifying children: $14,820 ($20,330 for married filing jointly)\n

      \"\"If you qualify for the Earned Income Credit, you\u2019ll need to complete a Schedule EIC, which can be filed with either the Form 1040 or 1040A.<\/em>
      \n\u00a0<\/em><\/li>\n<\/ul>\n<\/li>\n

    • Do you have a valid Social Security number?<\/strong>\n

      If you are filing jointly, both you and your spouse are required to have valid Social Security numbers issued by the Social Security Administration (SSA) by the date your tax return is due (including extensions). Any qualifying child claimed must also have one.<\/li>\n

    • Is your status \u201cmarried filing jointly\u201d or \u201chead of household\u201d?<\/strong>\n

      Couples whose filing status is \u201cmarried filing separately\u201d cannot claim the EIC. An exception here: A couple is married, but one spouse did not reside in the home at any time during the second half of the year. The spouse who remained might qualify for the EIC if his or her filing status is “head of household.”<\/li>\n

    • Were you or your spouse a U.S. citizen or resident alien for the entire tax year?<\/strong>\n

      This is complicated. If one of you was a U.S. citizen or resident alien but the other was a nonresident alien for any part of the year, you may qualify for the EIC if your status is \u201cmarried filing jointly.\u201d If that\u2019s the case, you will be taxed on your “\u2026joint worldwide income.”<\/li>\n

    • Was your income earned only in the United States and\/or a U.S. possession?<\/strong>\n

      If you earned income in a foreign country and you plan to exclude it from your gross income, you cannot claim the EIC. Filing a Form 2555 (Foreign Earned Income) or Form 2555-EZ (Foreign Earned Income Exclusion) disqualifies you.<\/p>\n

      \"\"2015 Form 1040, lines 66a and 66b (EIC information appears on lines 42a and 42b of the 2015 Form 1040A)<\/em>
      \n\u00a0<\/em><\/li>\n

    • Is your investment income $3,400 or less?<\/strong>\n

      Simple enough. For the Form 1040, this includes:<\/p>\n

        \n
      • Interest and dividends,<\/li>\n
      • Capital gain net income, and,<\/li>\n
      • Royalties and rental income from personal property.<\/li>\n<\/ul>\n<\/li>\n
      • Do you have earned income?<\/strong>\n

        This means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. But you may be in another situation that would make you eligible for the EIC. For example, nontaxable combat pay, ministers\u2019 housing, and strike benefits provided by a union are considered earned income.<\/li>\n<\/ol>\n

        Only Part of the Equation<\/strong><\/p>\n

        If you believe that you\u2019re able to claim the Earned Income Credit, or if there are other tax-related topics that you don\u2019t fully understand, we\u2019ll be happy to look at your entire financial scenario. If you\u2019ve filed an extension for 2015, we can work with you to make sure you\u2019re taking all of the deductions and credits that you\u2019ve earned.<\/p>\n

        As always, tax planning should be a year-round process. Let us know if we can help you start preparing now for next year\u2019s filing.<\/p>\n","protected":false},"excerpt":{"rendered":"

        Individuals who are working and who have low-to-moderate taxable income may qualify for this income tax credit. When you think about ways to offset your income as you\u2019re preparing for income tax time, do you primarily consider the deductions you can take? Things like home mortgage interest, charitable donations, and taxes you paid that can […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4],"tags":[],"class_list":{"0":"post-691","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-taxes","7":"entry"},"_links":{"self":[{"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/posts\/691","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/comments?post=691"}],"version-history":[{"count":1,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/posts\/691\/revisions"}],"predecessor-version":[{"id":692,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/posts\/691\/revisions\/692"}],"wp:attachment":[{"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/media?parent=691"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/categories?post=691"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/tags?post=691"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}