Billions of Tax Dollars
Go Un-claimed Every Year!
Learn how you can qualify for a greater tax refund
February 3, 2008
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By: Guest Columnist
Billions of tax dollars go un-claimed every year!
Learn how you can qualify for a greater tax refund.
Jane Doe makes $33,000 per year and so she
figures she doesn't qualify for any federal income tax
breaks, even with two kids.
With a salary of $635 per week, pert-near $16 per
hour, she has resigned herself to filing an EZ form
for her tiny rapid refund.
Hold on, Jane. Believe it or not, you are
eligible for about $3,500 combined from the federal
Earned Income Credit, the Child Tax Credit, and the
Child and Dependent Care Credit.
See Jane run! She is heading for the nearest tax
preparer. And hopefully she is spreading the word,
shouting it into the streets.
Billions of dollars go unclaimed each year. The
reason is because people like Jane fail to realize
that these benefits are not only for the lowest-income
workers, but also for folks with low-medium incomes.
They're for parents who make $7 an hour, but also for
parents who make $17.
If you are surprised to learn
you qualify, be happy. If you know others who should
know, please tell them. Places to call will come at
the end of this article.
But as the announcer says in those TV
infomercials, "That's not all!" Jane also may qualify
for various state tax credits. Michigan, for example,
has one break for home heating costs and another for
property taxes (even if you're a renter, because the
renter helps the landlord pay those taxes).
Back to that TV ad: "There's more!" If Jane looks
around, she can have her taxes prepared for free by
volunteers who are especially trained to know those
special niches for low- and low-middle income.
In Saginaw County, Jane may call the CAC,
Community Action Agency, at 753-7741 or the United Way
office at 755-0505.
In Bay County, the numbers are the Mid-Michigan
Community Action Agency at 894-9060 or the United Way
at 893-7508.
"There's still more!!" If Jane has been betrothed
to John Doe, will there be a marriage penalty? Quite
to the contrary. A married couple with that same
$33,000 income would reap nearly $4,000 in credits.
"Hard to believe?? Now get this!!" If someone
missed out on these tax benefits during the past, they
can file all the way back to 2004 in order to catch
up.
This isn't a giveaway. These tax credits simply
are intended to help hard-working families get back
the refunds they deserve.
We aren't forgetting the lowest of low-income ?
the nurse aides, the cashiers, the shelf stockers, the
burger flippers, the child-care providers, even some
waitresses. A person may earn so little that they owe
no taxes, but they still qualify for the credits. So
do foster parents, adoptive parents, care-giving
grandparents, even adults who care for younger
siblings. The only people with a gripe may be those
without school-age children, who can earn no more than
$14,500 and who can qualify for no more than $428.
Before we move ahead, a word of caution. You may
be starting to see ads for Refund Anticipation Loans.
These are offered not only by reputable tax preparers,
but also by auto dealers and furniture/appliance
stores. The pitch is that you can get money NOW
instead of waiting for your W-2's near the end of the
month. Unless you are truly desperate, please don't
give in, and please advise family and friends in the
same manner. If you can just wait until the start of
February, it will be well worth it.
On the other hand, starting now you can keep more
of your paycheck every week (or every two weeks)
instead of waiting until 2009 for another big
windfall. You'll get less next February, of course,
but you'll get more now, as much as $60 more per week.
This is called the Advance EIC, which you can reap by
filling out Form W-5. By law, your employer must honor
the W-5 and immediately begin withholding less from
your paychecks. If your employer is cool, she/he will
cooperate or even tell you about it. It's no skin off
of the boss's nose because the cost is neutral for the
employer. You still pay the same amount of taxes, in
the end.
An excellent web site to learn more about these
tax breaks is through the Center for Budget and Policy
Priorities, http://www.cbpp.org/eic2008/.
A 28-page booklet
with all the ins and outs is entitled, "Facts: About
tax credits for working families." If you really want
to do a community service, they even offer a 40-page
online booklet entitled "Outreach Strategies:
Promoting Tax Credits for Working Families." Advice is
offered for spreading the word through public benefit
programs, employers, schools, inner cities, rural
outposts.
Federal tax officials estimate that 22 million
families tap into these tax credits, but another 6
million fail to do so. This situation needs to be
improved, because as Wikipedia states online, the
credits "are one of the largest anti-poverty tools in
the United States."
Regardless of politics, this is the money that is
available for low and low-middle income families at
the moment. Please help those who are eligible take
advantage.
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