Do you owe $10,0000 or more in back tax debt to IRS or to state governments? Call Now 844-243-4405 for tax relief consultation.
There are many interesting facts and figures that are available to every American, absolutely free, through the IRS website, the problem however, is that much of the information that is available is in a language that seems foreign to readers looking for everyday, average wording. Call Now 844-243-4405 for tax relief consultation.
Child Tax Credit, Now, here’s a real savings to the individual taxpayer with children. The child tax credit is a direct tax credit that is available to provide credit to taxpayers with income below certain established levels. Call Now 844-243-4405 for tax relief consultation. The maximum credit per child is $1000 and is first applied to reduce or eliminate the taxpayer’s tax liability. How does this tax credit work, and does everyone qualify? Well, let’s start with the last question first. Yes, everyone with children qualifies, however the tax credit phases out when income is above $110,000 for married filing jointly, $75,000 for single, head of household, or widow, and $55,000 for married filing separately.
The 401(k) is a retirement plan implemented and provided to employees by their employer as a means to save for their retirement. Not only do many employers contribute to the employees 401(k) along with employee contributions (this is known as matching), but the contributions are pre-tax contributions; in other words the deduction is taken prior to calculating the state and federal taxes due on the wages. Call Now 844-243-4405 for tax relief consultation. This helps not only the employee, but also the employer. There are several variations of the 401(k) and depending upon your employer’s status as a small business, and their ability to fund a 401(k), you may operate under a SIMPLE 401(k), a traditional 401(k), or The Safe Harbor 401(k). All the plans vary as to their contribution limits, the employers required matching contributions, and the level of administration and IRS reporting that must be factored into the plan upkeep. Let’s take a look at each of the plans, and discuss some of the advantages and disadvantages of each.The SIMPLE 401(k) is best suited for small businesses that have a reliable earnings stream. In other words, their cash flow and earnings level are fairly steady and reliable, and they want to establish an easily controlled method for providing for retirement funding. Quite often, many of the family members will participate in the 401(k) as a way to fund their own retirement, and offset some of the taxable income from the family business. The disadvantage in operating this type of retirement account lies in the fact that contributions made on behalf of the employee by the employer are not optional, and some form of contribution must be made each year. The traditional 401(k) is the most often avoided plan by small to medium sized businesses, simply because of the massive reporting requirements, and the compliance testing that must be done each year. The administrative costs for the traditional 401(k) for a company of about 10 employees costs around $2000 per year to administer, and that doesn't include the setup costs or the costs of loan features. In addition to the optional features costs, there is the cost of offering many investment choices. Most of the 401(k) plans for small businesses that were surveyed had a much better rate of participation as well as lowered plan costs when only a few options were offered, instead of 10 or more.
Earned Income Credit, This is perhaps one of the best ways the government has introduced, to date, to raise families out of poverty, while requiring them to remain productive citizens. The Earned Income Credit is a refundable credit, that can be received even if no tax due that makes it a negative income tax. It’s the best investment in America’s working poor to date, and it is becoming a widely used tool to aid the individual taxpayer. The Earned Income Credit was brought to the forefront in 1998 by President Clinton, as a means of alleviating the taxing of working families into poverty. What has the earned income credit accomplished over the life of its existence? The earned income credit has provided some additional $3000 dollars per year to families of poverty level incomes; this has enabled better living conditions, better living standards, and a continued march to economic independence for many of these families. How does the earned income credit work, and who qualifies, let’s take a look. The earned income credit is a special tax benefit for working taxpayers with low or moderate incomes. For individuals earning less than certain specific levels with or without qualifying children, there is a tax credit that enables these individuals to receive a credit against taxes due, or a refund of income tax, that is known as a negative income tax. How do you qualify for the earned income credit? Well the qualification process is very simple; taxpayers with no qualifying children who earned less than $12120 over the year qualify for a small earned income credit. Taxpayers with qualifying children who earned less than $36,348 for the year will qualify for the earned income credit.