Now that we are a little over a month away from Tax Day and that awful black hole is opening up in Washington again, thoughts are turning to the greatest question an American taxpayer can ask: “How can I keep the tax man from picking me clean?” In a previous post, we discussed the legal way to handle your deductions. Now we’ll go over some of the other ways folks try to avoid being sucked in and crushed to a financial singularity. Understand this: These tactics will not save you and the least you will get for your trouble is a hefty fine.
According to our friends at H&R Block, these are some of the more common frivolous arguments that the IRS and the Federal Tax Courts look down upon. Each relies on misinterpretations, to put it politely, of the Constitution, the Tax Code or both.
Filing a tax return is voluntary . Wrong. Filing a tax retur... [Read Full Article]
Earned Income Credit (EIC)
The EIC is designed to offset the burden of Social Security taxes for low-income workers. You can claim this credit even if you have no tax liability.You may qualify for the EIC if your earned income and adjusted gross income are less than:
$12,590 ($14,590 if Married Filing Jointly) with no qualifying children.
$33,241 ($35,241 if Married Filing Jointly) with 1 qualifying child.
$37,783 ($38,348 if Married Filing Jointly) with more than 1 qualifying child.
Child Tax Credit
You can claim $1,000 for each child. This amount decreases once your adjusted gross income (AGI) exceeds the limit. For 2007, the credit begins to phase out when your AGI is more than these limits:
$75,000 if Single, Head of Household or Qualifying Widow(er)
$110,000 if Married Filing Jointly
$55,000 if Married Filing Separately
If your tax is reduced to zero and your earned... [Read Full Article]