Posted by LWM Team on Tue, Feb 09, 2010
Across the board, nearly every working class family seems to be affected by the current economy. However, when it comes to income tax relief, solutions arise in many different forms. Take today and consider your given options for tax relief. Many people are suffering from debt owed to the IRS. If you are one of those people there are several options available that your local tax professional can assist you with.
Penalty Abatement is just one choice that you can consider. The penalty abatement will give you the opportunity to wipe clear the penalties applied to your account for past due balances. It may seem like a small thing but the penalties add up rapidly and most people struggle to pay those off, just to get to the actual debt owed.
Other forms of income tax relief come through Earned Income Credit (EIC). EIC will typically apply to middle or lower working class with child care expenses. There are also many other possibilities such as Education Credit for the struggling student, Adoption Credit for people who adopt children, and if you stash away retirement money you may be eligible for a Retirement Savings Credit. And in today's green world, even Energy-Saving Credit is available to those who qualify.
Take a moment from your day and schedule to meet with a financial expert who can help steer you through the sea of options available to you for income tax relief. The average person won't make it through the red tape and regulations by themselves, and most likely will not be aware of the many choices available to them. So even if you're not owed a refund, the credits will result in a lesser amount owed to the government and will result in less out of pocket expense. Keep in mind that deductions can also be given, in addition to the credits. Relief is available to those who invest the time to know their options.
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!
Posted by LWM Team on Mon, Feb 08, 2010
A ‘Little Luck of the Irish’ is always welcome! If you were lucky enough to get married ANYTIME before December 31st, then your wife and kids can be considered YOURS for tax purposes when you file, even though the marriage was only recent! This also excludes any other potential ‘claimer’ from claiming what is NOW yours! Extra dependents are always welcome now aren’t they? And you might get an added benefit if there are kids and you qualify for earned income credit. The honeymoon could be exceptional with a refund instead of a tax bill!
Exclusions DO Apply
Watch your ‘p’s’ and ‘q’s’ here though... if your new wife has given permission to the natural father for the purpose of claiming either dependent status or earned income credit, you NEED to know. Two people filing for the same children’s credit is a definite RED FLAG to the powers that be! Your new wife, if she is considered the custodial parent, may choose to give that permission or NOT. But if both parents are considered custodial parents, as in the case of joint physical custody, the slope could be slippery. Also know that any income your wife has had, must be added to yours... and this could dampen the dream of riches just a bit if it makes the income level too high for credit or refund!
When getting married, people do not usually think much about benefits or short-falls... such is love! But marriage can throw a curve ball in your tax situation and you can either “hit a homer” or “strike out!” Not to worry... there is a whole year ahead to get tax relief information together and be ready to hit the ball next tax season... with a new set of dependents to throw into the ball game!