tax break Guest
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Posted: Fri, Feb 4 2005, 2:53 pm EST Post subject: A great tax break that's hard to get |
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A great tax break that's hard to get
The earned-income credit can provide a wonderful windfall. It also can be excruciatingly hard to understand, but it's well worth claiming if you qualify.
If you don’t earn a lot of money, you could qualify for one of the most valuable credits there is -- the earned-income credit. This is a credit, not a deduction. It reduces your tax, dollar for dollar.
But you don’t even need to have a tax liability, or even much income to qualify. The earned-income credit is really a reverse income tax. It’s what the tax professionals call a “refundable credit.” Because of your low income, the IRS is going to send you money.
The problem is that almost nobody knows how to navigate the complicated convolutions necessary to make the claim. It was a late night when Congress drafted this provision, and it shows.
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