Posted by LWM Team on Mon, Feb 08, 2010
It's another area where being married just doesn't pay. Earned income credit is a MAJOR help for people who are considered middle to low income and are just barely getting by. It can get you off the hook for tax liability if what you owe is less than the earned income credit you qualify for. One ‘lil darling is worth about a $1,000 more or less depending on the bucks you make. But two ‘darlings and it almost doubles... making tax time like a picnic in the park! Dreaming of what it should be spent on, is sort of like having a jump start on the coldest day of winter. But sweet dreams usually go bye-bye...because the car kicks the bucket or the ‘frig' goes on the blink...right when you think you're home free! But 'tis so sweet to reach in the pocket and pull out cold hard cash! Trouble is past two of the little darlings there is no more credit increase! If you're married it's just too bad so sad.
But WAIT there's a little loophole!
With today's non-traditional families on the rise, some unmarried couples with children are reeling in the dough by triple or double digits! An unmarried ‘family of four' can easily divide the children and each claim two of the little angels therefore DOUBLEING what they might normally get in earned income credit! We're talking' buying the car AND taking a vacation to Hawaii here! But each individual filing MUST be the biological parent of the two children they claim. Only the ‘real parent' can claim the child on earned income credit.
With today's earned income credit laws, wedding bells may not be ringing anytime soon. But the financial boost to the family might be a ‘whopping' good alternative!