Earned Income Tax Credit or EITC as the Internal Revenue calls it
is a special tax credit the U.S. government has provided for low income
and moderate income individuals. Another way of putting it is, it’s
money the government is giving your low-income wage earner tax
clients, as a bonus for working hard for a low wage.

The government has significantly curtailed welfare in the United States,
and minimum wage is far too often the norm for many hard working
unskilled Americans. The government has provided a financial windfall
or tax credit as it is called to make up for the huge disparity between
low-income wage earners and the high cost of living in the United States.
The problem is, many of them don’t understand how they can get money
back on their taxes they never paid in the first place, so many still do not
benefit from the earned income tax credit and millions of dollars sit in
the federal government coffers, unused.

Tax preparers still have time to give this tax credit to their low-income
wage earners, if they have already filed their taxes, you can file an
amendment for them. There are specific qualifications that MUST be met
in order for your clients to qualify for the earned income tax credit.

>Low-income wage earners MUST meet the following EITC
requirements to receive the credit:

The wage earner must have a valid Social Security Number

The wage earner must have earned income from employment or from self-employment.

The wage earner filing status cannot be married, filing separately.

The wage earner must be a U.S. citizen or resident alien all year, or a nonresident
alien married to a U.S. citizen or resident alien and filing a joint return.

The wage earner cannot be a qualifying child of another person.

>The wage earner can qualify if he or she has no children but, if he or she does
not have a qualifying child, he or she must:
Be age 25 but under 65 at the end of the year,
Live in the United States for more than half the year,
Cannot qualify as a dependent of another person
The wage earner cannot file Form 2555 or 2555-EZ (related to foreign earned income)

>EITC Thresholds and Limitations
Special rules may apply–Current Tax Year 2005

>Earned income and adjusted gross income (AGI) must each be less than:
$35,263 ($37,263 married filing jointly) with two or more qualifying children;
$31,030 ($33,030 married filing jointly) with one qualifying child;
$11,750 ($13,750 married filing jointly) with no qualifying children.

>Tax Year 2005 maximum credit (money that will be paid to the wage earner):
$4,400 with two or more qualifying children;
$2,662 with one qualifying child;
$399 with no qualifying children.
Investment income must be $2,700 or less for the year.

A “Qualifying Child” - A “qualifying child” may enable a taxpayer to claim
several tax benefits, such as head of household filing status, the exemption
for a dependent, the child tax credit, the child and dependent care credit
and the earned income tax credit. Prior to 2005, each of these items defined
a qualifying child differently.

If you have already filed for your clients taxes they are still eligible for the
Earned Income Tax Credit, you can file an amendment for your client.

Lois Center-Shabazz is the author of, Let’s Get Financial Savvy! ISBN#0971979502,
And editor of http://www.Msfinancialsavvy.com

Receive her free enews, MsFinancialSavvy enews at:
http://www.msfinancialsavvy.com/register/ecourse7.php

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The accessibility of tax preparation software these days does more than allow you the possibility of computing your yearly income tax and transferring in your calculated return. Today, the tax preparation software programs take account of features that make tax preparation easy. Utilizing these features enables you to evaluate a variety of scenarios involving income tax concerns. Whether you own a single proprietorship or incorporated business, tax preparation software can always save you from burden of manually filling out your annual tax forms.

Top Pick Tax Preparation Software Programs

QuickTax Tax Software: This tax preparation software features their exclusive EasyStep Interview, which includes a step-by-step tax preparation method, investment gains and incorporation analyzer, and the capacity to handle manifold tax calculations.

TAXWIZ Tax Software: This software is effective when preparing several individual income tax returns, as this similarly contains features found in the QuickTax. However, the CD-Rom is only available for Windows.

TaxTron Tax Software: This software is available for both Macintosh and PC, and comes in a personal as well as a corporate version. The corporate version allows you to file your personal or company income tax easily and quickly.

GenuTax Tax Software: There is no reason for you to worry because this software can prepare, file, and send limitless tax returns.

UFile for Windows Tax Software: An “interview” interface allows you to manually enter your pertinent income tax data. Using this software, you are also able to compute for your capital gains and access an online income tax preparation and submission forum.

Turbo Tax: This program which has state, federal, and home-based business versions available is very easy to run. With merely the click of the mouse, you are directed to the answers to your tax queries.

TaxCut Software: An interview method which is easily maneuvered enables you to input the important details that will complete your state, federal, or corporate tax returns.

Now it is easy and hassle-free to organize your annual income tax returns. You can take your pick from the most sought-after tax preparation software and purchase the one that suits your needs the best. Hopefully filing taxes will be as quick and painless as possible, thanks to these software packages!

Tax Software provides detailed information on Tax Software, Income Tax Software, Tax Preparation Software, Free Tax Software and more. Tax Software is affiliated with Email Survey Software.

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Online Tax Preparation makes it easy to ‘do it yourself’. With the simplified processes of online tax prep along with the information age of getting more info, you can actually file your income tax without a lot of pain and agony, but If you file your taxes online, with the knowledge you gain from online resources, and don’t have someone to ‘look them over’ will you get the most from your deductions? Will you even take them?

Occasionally, I meet someone who filed their tax return online who chose not to itemize their deductions, because they don’t want to be audited. Umm.. Well. An audit is always an option, IRS retains that right if they feel something is amiss, but they do not generally audit authentic deductions, or income. Their purpose is clear, to get the most reasonably from the tax payers. The provisions for deductions are provided to prevent you from paying more than your fair share of taxes.

Your purpose is to get the most benefit from the money you spend. IRS calls these deductions. If you must prepare your own tax return, it is imperative that you organize your income and expense records well prior to preparing the return. Gather your information and put it all together in one place. Total all accounts and put the totals in a clearly organized format, where you can use them to fill out the documents online.

An online FREE Tax Planner and Preparation Guide available for download at http://www.lulu.com/content/209190 would be helpful with getting your information down in an organized format.

Other helpful online resources include www.turbotax.com, but you’ll want to have your Tax Planner and Preparation Guide filled out and handy before you open an online tax preparer.

Webpreneur and Content Provider, Jan Verhoeff, has learned to focus her business on meeting the needs of others. By creating an atmosphere where many can achieve their desired goals, Jan moves steadily toward her own goals. What is your dream business? Are you there yet? Let Jan help you achieve your business goals with information, resources, and consulting that works. Visit her at http://www.freewebs.com/janverhoeff

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