With the holidays upon us, most of us are beginning to worry about having the money to cover all of those holiday expenses! If you have kids, you know what I’m talking about. It seems like, the older they get, the more expensive their tastes become!
The first thing that comes to mind for most is that tax refund we’ve come to expect in the early part of the year. You may be pleasantly surprised when you complete your 2009 return to learn that the American Recovery and Reinvestment Act (ARRA) calls for many changes that will primarily affect the individual taxpayer’s bottom line. Among the extensive list of changes in store for this tax season is a temporary increase in the earned income tax credit, or EITC, for taxpayers with three or more qualifying children. Until now, the maximum number of children that impacted the EITC calculation was two. Additionally, the ARRA also calls for an increase in the income levels associated with all taxpayers eligible for the credit. For example, for a married couple with one child, the credit will begin to phase out when their income level reaches $21,420 and will be completely eliminated when their income exceeds $40,463. These numbers have increased by approximately $3,500 over the 2008 figures. For more information related to your eligibility, you can click here to view a complete description of this year’s earned income tax credit.
The EITC has seen significant change since it was enacted in 1975. This expansion, although temporary, should surely help the many families that are struggling to make ends meet in this struggling economy.
Stay tuned for more posts related to the ARRA and how it may impact you this tax season!
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.