Page 5 - Perspectives 2017 | 1st Quarter HQ

Life’s a little easier with
Earned Income Tax Credit is for people who work for someone else or own or run a business. To qualify, you must have low to mid income. If you qualify, you must file a federal tax return to get EITC even if you owe no tax and are not required to file. With EITC (sometimes called EIC), you could pay less federal tax, pay no tax, or receive money back. The amount of EITC changes based on:
if you are single or married and
if you have no children or the number of children living
with you.
All people eligible for EITC have seven things in common:
1. Have earned income
2. Have a valid Social Security number
3. Do not file as married filing separately
4. Generally are not a nonresident alien
5. Are not a qualifying child of another person 6. Are not filing Form 2555 or Form 2555-EZ 7. Have limited investment income
Four most common EITC filing errors:
1. Claiming a child who does not meet the qualifying tests for age, relationship and residency
2. Filing as single or head of household when married
3. Under or over reporting income or expenses
4. Social Security number and last name mismatches
Are you paying someone to do your taxes?
Going for tax help or return preparation? Go prepared with:
Valid driver’s license or other photo id card for you and your spouse if filing a joint return
Social security cards or a Social Security number (SSN) verification letter for all persons listed on the return
Birth dates for all persons listed on return
All income statements: Forms W-2 and 1099, Social
Security, unemployment, and other statements, such as pensions, stocks, interest and any documents showing taxes withheld. If self-employed or you own or run a business, bring records of all your income
All records of expenses, such as tuition, mortgage interest, or real estate taxes. If self-employed or you own or run a business, bring records of all your expenses.
Copies of last year’s state and federal tax returns, if you have them
Bank routing numbers and account numbers to direct deposit any refund
Dependent child care information: name and address of who you paid and either the caretaker’s SSN or other tax identification number
Both spouses to sign forms to e-file your joint tax return
Your preparer, whether paid or volunteer, needs to ask many questions to file your return correctly.
Errors can delay the EITC part of your refund until it’s fixed. If the IRS audits your return and finds the EITC claim incorrect, you must pay back the amount of EITC you received in error plus interest and penalties. You may also have to file Form 8862 for future claims. And, if the IRS finds your incorrect claim was intentional or fraudulent, we may ban you from claiming EITC for 2 or 10 years.
Be sure to choose one who uses a PTIN, preparer tax identification number and signs your tax returns. See irs.gov for more information on how to choose a tax return preparer.
See if you qualify.
www.irs.gov/eitc
Or ask your tax preparer
Publication 4194 (Rev. 10-2014) Catalog Number 59737M Department of the Treasury Internal Revenue Service www.irs.gov