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Earned Income Tax Credit Tips for Single & Head of Household Filers

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”

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Tax Deductions for Landlords (Part 3)

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. 

What Qualifies?

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)”