Earned Income Tax Credit

Earned Income Tax Credit Eligibility

To qualify for the EITC, you must have a Social Security Number, work for pay, and earn less than a certain dollar threshold (amounts detailed later).  There are many other requirements including USA citizenship/resident alien status and limitations on investment and foreign income, but those are typically not issues for people otherwise qualified for the EITC.

Work for Pay

Unemployment income doesn’t help you qualify for the EITC. Neither does bank interest.  In order to receive any money via the EITC, you must work. You can have a traditional job as an employee or you can be your own boss and earn money from self-employment.  But one way or another, you’ve got to earn some money in order to qualify for the EITC.

Income Limits

For the 2011 tax year (the tax return you’re about to file), your earned income (what you receive due to your work), and your adjusted gross income (AGI, the sum total of all of your earnings less certain deductions) must be less than:

• $43,998 ($49,078 married filing jointly) with three or more qualifying children

• $40,964 ($46,044 married filing jointly) with two qualifying children
• $36,052 ($41,132 married filing jointly) with one qualifying child
• $13,660 ($18,740 married filing jointly) with no qualifying children

Qualifying Children

As you can see above, the relevant income limits are much more generous if you take care of at least one qualifying child.  Your child qualifies if he or she meets all of the following conditions:

• Has a valid Social Security Number
• Is your child (natural, adopted or foster), grandchild, sibling, step-sibling, half-sibling, niece, or nephew
• Younger than you and younger than 19, unless a student (in which case your child must be less than 24), or totally and permanently disabled (in which case there is no age limit)
• Lives with you in the United States for more than half of the year
• The child doesn’t file a joint tax return.

For more information or to help determine your eligibility for the Earned Income Tax Credit, use EITC Finder app by Intuit.

Claiming the EITC

The EITC Finder  app and TurboTax can help you claim the Earned Income Tax Credit.  Note that unlike many other tax credits, the EITC is a refundable tax credit. This means that the EIC can not only eliminate any income tax liability you might otherwise face but, to the extent your tax credit exceeds your liability, you can pocket the difference. It is for this reason that the EITC is one of the most important tax considerations.

Make sure to review the table above and use the EITC Finder app– if your income is below the relevant threshold, .  It just might mean an extra $2,000 or more in your pocket. Few other tax maneuvers can earn you that kind of cash!

earned income credit app

According to  the IRS, an estimated 20 to 25 percent of qualified workers fail to claim the EITC each year.  Intuit has just launched the free app called the EITC Finder to help determine if you can reap the benefit of one of the most missed tax credits, which may put up to $5,700 in your pocket.

The Earned Income Tax Credit is a tax credit for people who work, but have low wages.  The tax credit not only reduces the amount of tax you owe, but it also may give you a tax refund even if you didn’t pay enough income taxes.

In order to claim EITC, you must meet specific criteria, which is where the new app comes in to simplify the process of helping you determine your EITC eligibility by guiding you through a few simple questions about your marital status, dependents, and wages.

If you are eligible, the app estimates how much will be applied to your federal and state tax refund.   The EITC Finder then tells you how to easily claim your credit by preparing and filing your tax return with one of the free products offered through IRS Free File program, which includes more than a dozen brand-name tax software products donated by private companies, including Intuit’s TurboTax Freedom Edition.

The app, available for iPhone, iPod touch and Android, also provides nonprofit organizations and others that serve lower-income tax filers with an easy and flexible way to help their clients determine EITC eligibility anytime, anywhere with Internet access.

The EITC Finder is now available in both English and Spanish from the App Store, Android Market or Amazon App Store .

More Help if You Need it

Intuit’s Free File product offer , TurboTax Freedom Edition, is specifically targeted to EITC-eligible taxpayers and all filers with an adjusted gross income of $31,000 or less. It is also available to active duty military personnel with an adjusted gross income of $57,000 or less in 2011.

Since 1998, Intuit has donated more than 22 million tax returns to low-and moderate-income taxpayers. In 2010 alone, Intuit donated more than 2.15 million federal and state tax returns via the IRS and state Free File programs.

Find Tax Assistance in Your Community

The Intuit Financial Freedom Foundation works with nonprofit partners across the country to help more taxpayers access its Free File product offering. These include the nation’s network of IRS Volunteer Income Tax Assistance programs, where taxpayers can get help from a volunteer to prepare and file their taxes for free. The Intuit Financial Freedom Foundation is partnering with sites in 11 states and 48 communities to bring TurboTax Freedom Edition to taxpayers this year.

Just in time for end-of-year tax planning, TurboTax launched its free TaxCaster app available for iPhone, Android and for the first time, the iPad. Updated for tax year 2011, TaxCaster, is a free tax calculator app that quickly provides an accurate estimate of your tax refund so you know where you stand before you file.

Quick, simple, and accurate. Sounds good to me! Just enter basic information about you and your family, your income, and tax deductions to get a good sense of whether you’ll owe money, or hopefully, get a nice tax refund when it comes time to file your taxes. Every time you enter information, the refund meter shows you how an item instantly impacts your outcome.

Also, new this year, TaxCaster allows you to input negative numbers if, for example, you need to show a loss. You can also modify your information or do “what-if” scenarios to see how actions may affect your bottom line. This makes it convenient to use the app year-round, especially if you have changes that impact your taxes, like a new child, buying or selling a home, or even adjusting withholding amounts.

The new app for iPad is optimized with iPad specific features and has a final review that displays all of your information at a glance. For the iPhone or Android app simply click on “details” to see your summary.

The cool sliders help you quickly modify your information by dragging the bar. You can also choose to enter information numerically. And…it’s safe.  Simply tap the “clear” button to remove data before closing the app.

TaxCaster features all the latest tax law updates and calculations of tax estimates are 100% accurate based on your input. While TaxCaster is not a tax preparation app, it will recommend the right TurboTax product to file your taxes, based on information you enter.

TaxCaster – Want to know how big your tax refund is going to be? TaxCaster is a free tax calculator app that will give you a quick tax estimate. Just enter basic information about you, your income and tax deductions to get a good idea if you will owe money or – hopefully – get a nice big tax refund. (iPhone, Android, WP7, WordPress plugin)

SnapTax – Prepare and file your taxes on your phone. Available nationwide and designed for taxpayers with simple tax returns (1040EZ), SnapTax allows you to snap a photo of your W-2, answer a few simple questions, review your return and e-file your federal and state tax return directly from your phone.  Download and try for free, pay $14.99 when you prepare and are ready to file. (iPhone, Android)

MyTaxRefund – Wondering “Where’s my refund?” MyTaxRefund, a free and easy app, is available to any taxpayer that has e-filed their federal tax return.  MyTaxRefund shows you the IRS projected status of your e-filed, federal tax return, tells you if your tax return has been accepted by the IRS and when the IRS estimates you’ll get your federal tax refund. (iPhone, iPad)

Apps can bring a little bit of fun and definitely convenience to your daily routine, so why not use them to help with your taxes too.

TaxCaster builds on the momentum of Intuit’s innovative, multi-platform suite of mobile offerings for consumers and small businesses. The company expects to introduce several new Windows Phone 7 apps in the coming months.

In today’s keynote at PDC10, Microsoft showcased TaxCaster, highlighting how the app extends Windows Phone 7’s design elements to create an easy, engaging user interface.

“Windows Phone 7 is backed by a rich developer ecosystem that is creating a variety of quality apps that take advantage of the phone’s unique features and design,” said Todd Brix, senior director, Windows Phone Marketplace, Microsoft Corp. “TaxCaster from TurboTax is a great example of the kind of rich applications that people will find on Windows Phone Marketplace to get the most out of their phone.”

“When Microsoft approached us about Windows Phone 7, we welcomed the opportunity to reach more consumers and to create a unique mobile experience on Microsoft’s platform,” said Murthy Pidaparthi, development manager for TurboTax. “TaxCaster for Windows Phone 7 expands our mobile offerings, adding a new platform for open innovation.”

TaxCaster is expected to be available for free download to Windows Phone 7 users in the U.S. on Nov. 8.

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About TurboTax

TurboTax is the nation’s No. 1 rated, best-selling, do-it-yourself tax preparation software. Available on desktop, online and mobile, TurboTax helps more than 20 million people a year easily and accurately claim every deduction and credit they’re entitled to, so they get the biggest tax refund possible. For more information, visit the TurboTax press room.

About Intuit Inc.

Intuit Inc. is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals. Its flagship products and services, including QuickBooks®, Quicken® and TurboTax®, simplify small business management and payroll processing, personal finance, and tax preparation and filing. ProSeries® and Lacerte® are Intuit’s leading tax preparation offerings for professional accountants. Intuit Financial Services helps banks and credit unions grow by providing on-demand solutions and services that make it easier for consumers and businesses to manage their money.

Founded in 1983, Intuit had annual revenue of $3.5 billion in its fiscal year 2010. The company has approximately 7,700 employees with major offices in the United States, Canada, the United Kingdom, India and other locations. More information can be found at http://www.intuit.com.

[taxcaster]

TaxCaster takes full advantage of Microsoft’s easily styled controls and animations to create a compelling user experience. The pivot control enables you to quickly navigate through the application to enter your tax data.  TaxCaster builds on the momentum of Intuit’s innovative, multi-platform suite of mobile offerings for consumers and small businesses. We expect to introduce several new WP7 apps in the coming months.

TaxCaster is expected to be available for free download to Windows Phone 7 users in the U.S. on Nov. 8. Updated versions for the current tax year for all mobile platforms, including Android and iPhone apps, will be available in mid November.  Bloggers can also download it as a plugin here.

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