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Video instructions and help with filling out and completing how to calculate eic

Instructions and Help about how to calculate eic

Welcome to lesson 8.1 about the Earned Income Tax Credit tax credits are designed to offset tax liability in the form of refundable credits or non refundable credits refundable credits are preferred in a lot of cases because even if there's no tax liability the taxpayer can get the entire amount of the credit whereas non-refundable credits can only offset the amount of taxes owed and anything past that the taxpayer will not receive the Earned Income Tax Credit is a refundable credit it's the largest government anti-poverty initiative and it's designed to push people above the poverty line so it's very important to a lot of our clients that are receiving this credit and that's actually why we have the name the Earned Income Tax Credit coalition there's two sets of rules for the Earned Income Tax Credit there's tax payers with kids who have to fall in certain rules and then there's a separate set of rules for tax payers without kids so don't mix them up both sets of rules don't apply to everyone if you already watched the video for dependents you'll know that there's rules for claiming qualifying children the rules are the same for tax payers claiming the Earned Income Tax Credit with their children so we're going to need to pass the relationship test we're going to need to pass that age test so they have to be under 19 or under 24 if there are students the residency test the only difference is there's no support test so if you have a child who's being supported by the other parent but living with you full-time and meets the age test and the relationship test then we can still claim them for the Earned Income Tax Credit even though we couldn't claim them as a qualifying child for that extra exemption so keep that in mind we won't see it often but it is something that we need to be aware of so those are the rules that kids have to meet if a taxpayer is trying to claim them for the Earned Income Tax Credit and then we have a group of taxpayer without kids who are going to be eligible for the Earned Income Tax Credit and they have a separate set of rules taxpayers must fall within a certain age category and that's 25 to 64 they cannot be claimed on another person's return so they can't be a dependent and they must have lived in the US for more than six months and a couple other rules please make note of it's not on the slide if the filing status of the taxpayer is married filing separately they're not going to qualify for this credit and a bunch of other credits as well as you'll find as you go through the videos and then for this specific credit as well taxpayers with ITINs are not eligible everybody must have a social security number that's claiming the Earned Income.

FAQ

Should I use a service to file for a tax return or do it myself?
Ok, an angle that wasn't yet covered here.The answers before me seem really good, so I'll address the actual services involved with helping with taxes, a key point about them.Since they're commercial businesses and they are essentially businesses it means their sole purpose is to make money for the owners of the business. While they will of course try to seriously do a good job with your papers, it does not necessarily mean that their service is good for you.Simply - if their service costs a significant portion of what you would get for returns. What I'm saying is, is it worth it if they make you 200$ and it costs 100$? Could you have looked at the VITA or instructions on IRS website and kept the 200$ yourself? Now, if it costs 100$ and they make you 1000$, it's a whole different thing, especially if you really, really don't want to do it yourself.Think if you were a boss of a shop. You always buy from same place, then you hire a guy to find the cheapest place to buy from. Will you pay 3000$ a month for a guy that saves you 2021. a month? No, it's still better to keep buying from same place.Now, is it good to hire a service that charges x$ for a thing you could do in 30 minutes yourself? Well, it depends how long it takes you to check the facts and how much you value your time and if you'll even be getting money to cover their fee.And finally:If you go and ask a guy who helps with something as a business he will use every bit of sales and marketing technique he knows to convince you, to sell you the idea that you need him. Because he makes money if he sells you the idea that you need him. It is the #1 thing for a guy selling something - to establish a need for it. Regardless if it's a real need or not, it's what anyone selling anything does, make you think you need whatever they're selling. Because, at the end of day, their job depends on it.So, whenever you go ask a guy selling anything about whether it's a good idea to buy from him, take it with a grain of salt. Because, they're going to say whatever it takes to get that sale. It's what they've been hired to do - they're salespeople.Salespeople are like goblins. Ultimately they don't care about you, they care about their own stats. If you actually benefit from buying from them, it's a bonus but even if it were against your best interests to buy it hardly ever stops them. It is easier to offer excuses later.
How is the minimum income for earned income credit calculated?
If you go to irs.gov, you’ll get a clearer information than my general attorney information. The real answer is “it depends.”EIC, has a lot of rules, and the rules change from year to year.EIC as of 2021. these are the factors that IRS looked at (this list is not exhaustive) to calculate the minimum income: age of taxpayer, filing status, immigration status, total earned income in home, number of individuals living in the home, how long each individual lived in the home, student status of some of the individuals in the home, the familial relationship between the individuals, who provided more than 50% support for each individual.
How much welfare fraud is there really?
I worked in south Texas with a work crew that all lived in Victoria, TX. They all lived in a community around a small park. At the end of the month or first of the month they would have a picnic or party in the park. Or they would have a “feed” at the construction site. BBQ, steaks, soft drinks of all kinds, potato salad, coleslaw, bbq beans, sacks of charcoal to cook with, new ice chests, everything. I ate with them and when done offered them money for my share of the food. They refused it as the spread hadn’t cost them anything. I was confused and they explained that at the end of the month before the STAR cards or EBT cards are recharged. They gather all the cards in the community and go to a small grocery store and check the total on the cards, then buy what they need for the “feed” or BBQ. When they want tobacco or alcohol they scan pricy items then refund them for the tobacco and alcohol. The cards are all zeroed out with the months supply of tobacco, alcohol, the food for the “feed”, and any extras. At midnight the cards are recharged and everyone buys what is needed for the month. They did this every month. They would eat what they wanted at that meal then, throw the majority of it away because they had it so often. I would eat with them and put most of it in cold storage to eat later in the week. I would offer them some and it was usually refused. It got that I was tired of eating it all the time and I only ate it at the end of the month when they did. I convinced them to share with the rest of the crews so that there wouldn’t be as much waste. The ice chests and other ancillary items would usually be broken by the next months “feed” rolled around and they would buy a couple of new ones. This attitude of “just buy another one” when something broke rolled over into their work ethic and construction operations. They wound up getting fired for damaging equipment, loosing tools, breaking products, etc. which caused cost overruns and loss of profit.
What were the tax rates during the British government in India for a common man?
Thanks for A2A,Here EIC refers to East India Company,In 1758, a tax of 10% on the produce of the landed estates in Bombay was imposed by the EIC to meet its extravagant expenses.The EIC levied a tax on all salt produced in India, obtaining a revenue of more than f I. million per year, during the last years of its rule. The British imposed or enhanced taxes on land, trades, occupations and commodities. In South India, the taxes were raised from 12 to 16% of the gross agricultural produce to 50%. The tax was calculated on what the farmer obtained in a good agricultural year. If, for any reason, he had a bad crop he would almost surely make a loss because the amount of tax remained fixed.In 1929, the people of India were taxed more than twice as heavily as the people of England The percentage of the taxes in India, as related to the gross product, was more than doubled that of any other countrySource: Page on inflibnet.ac.in
How is the placement of YMCA Faridabad for BTech students?
A2A.This question needs a detailed answer if you need records. Even the campus records fail to show you the true picture.In a nutshell: YMCA's placements have bettered in the previous years. (Exception of Electrical and EIC branch if you calculate number of core companies but many of them got an off-campus offer too). So the answer depends a lot on what is the branch, student's interests and own qualifications.Some highlights for you (until this year, specially till 2k16 passout batch):Many CS/IT students bagged great placements salary-wise and brand wise. Companies willing to pay as high as 10lpa.Mechanical has maximum number of placed students. Packages are increasing Many also got opportunities after graduation through campus. (Note: But for 2K17 passout batch, lesser companies have made offers). Packages as high as 18lpa abroad to 6.5lpa here.Electrical/EIC ones with software knowledge and nice internships did really great off-campus. Or many went abroad for higher studies.So, its the vague answer to the question.Hope it helps. Goodluck!
How do rich people not pay tax?
Most wealthy people pay boatloads of taxes. As other answers have pointed out, the top earners pay most of the taxes in the US. At the other extreme, nearly half of the US households pay no income tax. So, in general, if you want to avoid taxes, don’t become wealthy.A few wealthy people pay no taxes in years that they lose money. (This is a tax “strategy” that I and most other consultants don’t recommend.) Yet even in loss years they can pay massive amounts of other taxes, such as state income taxes, property taxes, employee payroll taxes, and sales taxes.A few wealthy people legitimately avoid paying taxes. But there’s a reason most other wealthy taxpayers aren’t following the lead of the other wealthy people. Typically those strategies required the wealthy person to invest in highly leveraged risky ventures. For most wealthy individuals, once they’ve worked hard, made good decisions, and find themselves with a lot of assets, they don’t want to put their wealth at high levels of risk.For example, the government provides additional tax benefits for investments in low income housing. The purpose is to motivate wealthy taxpayers to invest in housing in areas that are run down and otherwise would offer only slum conditions to the residents. Without the tax benefits, no one would even consider investing in those areas. The tax benefits can significantly lower taxes for a few of the wealthy, but the economic risks to the investor are significantly higher than if they invested in more stable local economies.Similarly, if a wealthy investor invests in highly leveraged real property and uses like-kind exchange deferrals when disposing of property, that investor can “avoid” paying high amounts of taxes in certain years. However, the taxes avoided are not permanent. When the real property is sold in a taxable exchange, or when the depreciation on the property is substantially exhausted, the investor will eventually pay the taxes. And as with low income housing, the risks are significantly higher than for many other investments.If anyone has the cash or borrowing property to heavily invest in real property, I can help them “avoid” taxes. However, that person must be prepared to assume the tremendous risk of a volatile investment that requires not cashing out profits for many years. It’s a strategy that the feint of heart would not pursue.A few wealthy people cheat, a phenomenon no different from those in other income strata. But that percentage is low, and if they are caught, they not only pay the “avoided” taxes, but they pay massive amounts of penalties and interest. In many cases they go to jail.Al Capone is an example. He paid no income taxes for many years, while living an opulent lifestyle. Law enforcement could never get a conviction for his crimes, but the IRS took him to court and got a conviction on tax evasion. The evidence was that there’s no way his lifestyle could be attained while paying no income taxes. He lived his last years in jail.I find it interesting that the media portrays the “wealthy” as chronic abusers of the tax system, yet you read very little about the massive abuses perpetuated by those who are not wealthy. For example, one of the largest tax benefits paid by the US government is the earned income credit. By definition, the EIC benefits are paid to the poor. And most recipients of the EIC pay no income tax, yet receive often substantial refunds. (That’s called a negative effective tax rate.)Further, studies have concluded that as much as a third of EIC payments go to individuals who have either calculated their EIC incorrectly or are committing outright fraud.The easiest way to “avoid” taxes is to not work, collect the various benefits from welfare, low income housing, dependent care, etc., etc., and claim the EIC. Then work on the side performing a service for which you are paid in cash, such as house painting or a lawn service, and then don’t report the income.If you really want to game the system, engage in illegal activity on the side, such as dealing drugs. You can make a lot of money and avoid paying taxes altogether.Another plan I don’t recommend. If you get caught, you’ll end up in jail.It’s the same as wealthy people who illegally avoid taxes and get caught.
With the new tax laws, how can I know if the correct amount of withholding is being taken of my paycheck?
If the “correct amount” is your actual tax liability, then you look and see how much you owe ‡ or how much of a refund you are getting ‡ when you prepare your return in April. Until you can do that, you’re just estimating.If the “correct amount” is the amount that your employer is supposed to withhold based on your W-4, then you can assume that it is correct. Very few payrolls are done manually these days.
Is the US taxation system fair?
It depends on which aspect of the system you’re looking at. It’s a huge, complex, multi-tiered system. It’s not just income taxes at the federal level, which is what most people think about when they think about “taxes.” It’s the income, sales, property, and other taxes across all levels of government one has to consider.Habib’s answer is correct and the partisan divide being mirrored in people’s feelings on tax fairness, but there’s an element that is missing: It’s not just about what people pay (or, rather, have taken from them) in taxes, but also what they get for those taxes.The more you make, buy, or own, the more you pay in taxes. However, the higher up in income scale you go, the less direct benefit you receive from those taxes in some cases. You end up paying a lot more for a lot less, while others who pay much less receive more. To some people, that seems unfair.It’s much easier to think the tax system is fair if you can see tangible benefits for all of the money they’re taking from you.Want to meet someone who thinks taxes are unfair? Find the middle-class homeowner whose street is un-drivable because it hasn’t been paved in so long, who has to pay for private school because the public schools are so run-down, and whose business is being undercut by illegal immigrants. Eventually, they begin to wonder, “what the hell is the government doing with all of that money they take from me? They seem to be interested in helping themselves and everyone else but people like me.”And they start to see the government as the bad guy‡ the entity that takes the most from them, and provides the least. They vote for politicians who promise to reduce the reach of government in their lives and their wallets.A tax break that will give me $100 back and give billionaires millions back? Let’s do it. The government is just going to waste all of that money anyway.On top of that, many tax deductions have upper income limits where you no longer qualify for the deductions. If you earn too much, not only do you pay more in taxes, but you get fewer breaks from the government.For example, a married couple filing jointly who earns more than $165k annually can no longer deduct their student loan interest from their taxes. It’s easy for some people to say, “well, they should be smarter with their money and pay off those student loans,” but that’s not the point. It’s not about “being smart with your money,” it’s about the fairness of being disqualified from a deduction because you’ve been successful in your career.At the same time, that couple that makes $165k+ annually, but can’t deduct their student loan interest from their taxes, will also be given less help in paying for their children’s college tuition, because they qualify as “high income.”The University of Illinois, for example, which is partially paid for by state taxes, which are disproportionately funded by high-income earners, offers significantly less financial assistance for the children of those high income earners. If your parents are rich, they pay a lot in taxes, which helps fund the college, yet the college also won’t cut you any breaks on your tuition, because “you can afford it.”Those parents are paying for that college twice, while other parents aren’t paying for it at all. To some, that kind of income redistribution seems fair. To others, it doesn’t. I suspect people’s idea of “fairness” in this matter not only falls upon partisan lines, but also on socio-economic lines. The further you deviate from the middle, the more/less fair this sounds.When left-wingers complain about the tax system being unfair, they’re usually complaining the “the rich aren’t paying their fair share” or some variation of that. When right-wingers complain about the tax system being unfair, they’re usually complaining about income redistribution and a tax system keeps people dependent upon government assistance, at the expense of those that aren’t.Both sides have their points.If you’re working and can’t afford something, but you know others who aren’t working and the government provides that thing for them, it leads to a lot of animosity and a feeling of unfairness. It makes you feel like you’re the schmuck for working so hard. It leads to bumper stickers like this (from the internet):I’m going to make an educated guess that the owner of this car voted for Trump.