Your Tax Question - 062

Dear John, Will I qualify for the EIC this year? Thanks, Frank

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Hi Frank,

Um, usually I require a little more information but I'll tell you what I know.

Here are the 2010 tax year income limits, maximum EITC amount and the EITC-related tax law changes. You can also access the information for:

2010 Tax Year

Earned Income and adjusted gross income (AGI) must each be less than:

• $43,352 ($48,362 married filing jointly) with three or more qualifying children
• $40,363 ($45,373 married filing jointly) with two qualifying children
• $35,535 ($40,545 married filing jointly) with one qualifying child
• $13,460 ($18,470 married filing jointly) with no qualifying children

Tax Year 2010 maximum credit:

• $5,666 with three or more qualifying children
• $5,036 with two qualifying children
• $3,050 with one qualifying child
• $457 with no qualifying children

Investment income must be $3,100 or less for the year.

The 2010 Tax Act extended the previous EIC extensions through 2012. And remember, this credit is a refundable credit that returns any amount below $0 to you.

While I am not sure of your specific situation Frank, you should be able to assess it for yourself with the information that I have provided.

And remember, should you want some help with this - I would love to prepare your taxes. ;-)

John

Your Tax Question - 061

Dear John, So is it true that this is the final year for the $1000 per child tax deduction? I was really like this little reduction from the taxes that I pay each year. Please let me know. Sincerely, Angela
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Hi Angela,

The child tax credit was due to expire after 2010 but it has been extended for two years. The child tax credit allows parents to reduce their federal tax bill by up to $1,000 for each qualifying child under age 17.

Also, the expansion of the Earned Income Tax Credit included in the economic stimulus package will continue for two more years as well. But I will leave that for another post.

Thanks,

John

PS. As of now, there are only 76 more days until tax day. If you could use a tax preparer I happen to know this really cool guy that does this sort of thing.