Earned income credit is a very important tax paying benefit that is extended towards the low-income groups of the country. Earned Income Credit or EIC is essentially an anti-poverty attempt at lowering the tax burden on those who need it the most. The main targets of this anti-poverty measure are families with low income. The benefits of EIC are also available to individual earners who cannot show an eligible list of dependants who can count as the taxpayer’s family.
The EIC provides for lowered tax returns for those who successfully qualify for the program. There are also chances of the tax being done away with altogether in case the person is eligible for complete tax waiver or has credit that that is larger than the tax owed. In this case the Internal Revenue Service called IRS will be giving back some money to the person. This amount varies but in this case the government is paying that person an amount of money as an added bonus to what the person is currently earning. This measure was mainly taken by the government to encourage people to work more so that poverty is considerably reduced.
The eligibility of a person depends on the adjusted gross income that is counted on an annual basis. If the person is an individual and does not have a family then the total amount is lowered to around $12,880. If the person is earning below this amount then the person is eligible for EIC. If the person has a family and children then the ceiling is higher. However, workers with one child have a lower ceiling than workers with two or more children. Workers with one child must have earned lower than about $33,995 to qualify for EIC. If the person has two or more children then the ceiling becomes $38,646.
Once you are sure that you are eligible for the EIC, you can apply for it by filing a tax return. However, filing tax returns by hand is really cumbersome and very confusing too. Also, you may not be aware of all the policies that apply to you. There is a far easier way of filing your tax return and that is called e-file.
E-file is a service from the IRS and taxpayers can also avail the service from IRS registered e-file service providers. E-file is essentially software enable; online, electronic tax filing that is more convenient than the usual procedure. The benefits of e-file are many. For starters, there is a lot less paperwork to do and hence there are fewer areas where you may have made a mistake.
It is also faster and more inclusive, in the sense that in case you are not sure of some policies or you do not know about them at all, e-file can help you clear up the confusion. For taxpayers with an AGI (adjusted gross income) of less than $56,000, e-filing is absolutely free. So join an e-file service today and reap your EIC benefits.
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