First comes love, then comes marriage, then comes a baby… and the Earned Income Tax Credit?
Here’s one for the next round of Jeopardy: the Earned Income Tax Credit or EITC was designed to offset the burden of Social Security taxes paid by low to middle income working families.
And here’s one you can take to bank: if you find yourself struggling to provide for your family you may qualify for the EITC and increase your refund at tax time .
Whether you qualify, not to mention the amount of the credit you’ll receive, depends on your income and how many qualifying children you’re supporting.
Eligibility is based on your income and your filing status
First, in order to qualify, you must file your tax return as married filing jointly. Your filing status can not be filing separately.
Second, your income earned (that is, the wages you received from your job or the net profits you made from self employment), can not exceed a certain threshold.
If you’re married filing jointly, your 2014 adjusted gross income, must be less than:
The Earned Income Tax Credit can add a total of up to $6,044 to your tax refund!
Being a single parent is no picnic. Parenthood is a tough gig, especially when you’re on your own.
Raising a family on one source of income is enough of a headache. On top of that, you have dinner to cook, homework to help with, and sports games to attend. It’s clear, you have a lot on your plate and could use more money in your pocket.
Here’s something you must know: to lessen the financial burden of being a single parent, the IRS offers the Earned Income Tax Credit to qualifying tax filers.
Why Your Income Matters
The EITC or EIC is a refundable tax credit that is only offered to taxpayers who earn low-to-moderate income from their job or from being self-employed. That means if you don’t work, you cannot claim the credit.
In addition, once your income goes over a certain threshold, you won’t qualify to receive the tax credit. Continue reading “Earned Income Tax Credit Tips for Single & Head of Household Filers”
Landlords can also deduct rental property depreciation…
In part 1 and part 2 of this article, we explained that the services and expenses that you paid for could be included as deductions on your tax return.
In addition to these expenses, you can deduct the depreciation of your rental property.
In other words, you can deduct the “wear and tear” costs of the rental property, including any improvements.
Confused? No worries! Keep reading and we’ll get to the bottom of what depreciation means, and explain what types of improvements you can include on your tax return.
What Does “Depreciation” Mean?
For tax purposes, you can deduct the cost of your property along with any improvements you made to it, in the form of depreciation.
Think of depreciation as a way to recover the costs associated with your rental property.
You won’t deduct the cost of buying or improving your rental property as one large tax deduction. Instead, you’ll spread the costs across the “life” of the property.
The amount you can depreciate is dependent on a variety of factors, such as how long the property (or improvement) will last and what it is. To learn more, visit IRS Publication 527, Residential Rental Property.
Owning a piece of property does not automatically qualify you to deduct it’s depreciation value. To deduct the depreciation of a rental property, the IRS requires that you also meet the following criteria:
- The property produces income (in other words, you rent it out).
- The property has a “useful life”, meaning it will eventually wear out, get used up, etc. (For example, a house has a useful life while an unused piece of land you own does not.)
- The useful life of the property is longer than one year. Continue reading “Tax Deductions for Landlords (Part 3)”