Billions of Tax Dollars
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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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