Home » Services » Tax » Earned Income Credit

Earned Income Credit

Earned Income Credit

The United States federal Earned Income Credit (EITC or EIC) is a refundable tax credit designed to encourage low-income workers and offset the burden of U.S. payroll taxes. For the tax year 2020, a claimant with one qualifying child can receive a maximum credit of $6,431. A claimant with two qualifying children can receive a maximum Earned Income Credit of $5,028. The Earned Income Credit is expanded for the tax year 2019 and 2020. For claimants with three or more qualifying children, the maximum credit is $5,657. Grandparents, aunts, uncles, and siblings can also claim a child as their qualifying child provided they shared residence with the child for more than six months of the tax year. However, in tie-breaker situations in which more than one filer claims the same child, priority will be given to the parent. A foster child also counts provided the child has been officially placed by an agency or court. There is a much more modest EIC for persons and couples without children that reaches a maximum of $457. A qualifying child can be up to and including age 18 at the end of the tax year, up to and including age 23 if classified as a full-time student for one long semester or equivalent, or any age if classified as “permanently and totally disabled” (one year or more). Enacted in 1975, the initially modest EIC has been expanded by tax legislation on a number of occasions, including the more widely-publicized Reagan EIC expansion of 1986. The EIC was further expanded in 1990, 1993, and 2001 regardless of whether the act in general raised taxes (1990, 1993), lowered taxes (2001), or eliminated other deductions and credits (1986). Today, the EITC is one of the largest anti-poverty tools in the United States (despite the fact that most income measures, including the poverty rate, do not account for the credit), and enjoys broad bipartisan support. In the United States as of the tax year 2006, some 20 states and the District of Columbia had their own EICs. These state plans generally mimic the federal structure on a smaller scale, with individuals receiving a state credit equal to a fixed percentage—generally between 15 and 30 percent—of what they are eligible to receive from the federal credit. A few small local EICs have been enacted in San Francisco, New York City, and Montgomery County, Maryland.

Earned Income Credit

The Earned Income Tax Credit, EITC or EIC, is a benefit for working people with low to moderate-income. To qualify, you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file. EITC reduces the amount of tax you owe and may give you a refund
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
contabilidad financiera,preparación de impuestos,contadores Miami,comprar o arrendar un vehículo comercial,las implicaciones de contratar a un empleado en comparación con el uso de un contratista independiente,auditoría,SBA,estados financieros,contador en Miami,QuickBooks,El flujo de caja,CPA,Accountant,declaración de impuestos,preparación de impuestos,Contador Publico,contadores,contador,contable

5 temas contable sobre las que hablar con su contador

Probablemente sea una buena idea que la mayoría de los propietarios de pequeñas empresas se concentren en el núcleo de su negocio, como vender ropa o diseñar sitios web y utilizar expertos Contador Público para ayudarlos en asuntos financieros. Según el IRS, más del 90% de las pequeñas empresas utilizan contadores para preparar sus declaración de impuestos, algo de lo que puede estar muy consciente durante la temporada de impuestos. Pero la declaración de impuestos de impuestos no es la única razón para utilizar un contador (Accountant o CPA en Inglés)

Read More »
Accountant,Certified Public Accountant,capital gains,Accountants Can Help Key Performance Indicators,Accountants Strategy For Struggling Businesses,Accountant,Why You Should I Hire an Accountant For a Small Company?,Maximize Your Accountant Relationship,Financial Statement Footnotes,Financial Statement Disclosures or Footnotes,Cost of Sales,COGS ,Cost of Goods Sold ,Last in last out accounting,LIFO accounting,First in first out accounting,FIFO accounting,accounting methods ,income before taxes,income from operations,operating expenses,Multi-Step income statement,Single Step income statement,balance sheet,income statement represents a period of time,gross profit,net profit,net income,company’s financial statement,statement of operations,operating statement,earnings statement,statement of financial performance,revenue statement,profit and loss statement,Profit & Loss,P&L,Income statement,How to read a P&L,How to read an Income Statement

How to read an Income Statement

Income statement (also referred to as profit and loss statement (P&L), revenue statement, statement of financial performance, earnings statement, operating statement, or statement of operations) is a company’s financial statement that indicates how the revenue (money received from the sale of products and services before expenses are taken out, also known as the “top line”) is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as Net Profit or the “bottom line”). It displays the revenues recognized for a specific period, and the cost and expenses charged against these revenues, including write-offs (e.g., depreciation and amortization of various assets) and taxes. The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported.

Read More »
Plan de pagos Largo Plazo,contador en miami,Plan de pago a Corto Plazo,declaración de impuestos,contadores en miami,Solicitud para un Plan de Pagos a Plazos,planes de pagos a plazos,Cuáles son los costos y cargos administrativos del plan de pagos,Qué es un plan de pagos?,plan de pagos con el IRS,Planes de Pagos con el IRS proveídos ,Planes de Pagos con el IRS proveídos Por un Contador Público en Miami,Contador,Contador Público,Contador Público en Miami

Planes de Pagos con el IRS Proveidos Por un Contador Publico en Miami

Un plan de pagos es un acuerdo con el IRS para pagar los impuestos que adeuda dentro de un plazo de tiempo ampliado. Debe solicitar un plan de pagos si cree que no podrá pagar sus impuestos en su totalidad dentro del plazo de tiempo ampliado. Si califica para un plan de pagos a corto plazo, no será responsable de un cargo administrativo. El no pagar sus impuestos cuando se vencen puede causar la presentación de un aviso de gravamen por el impuesto federal y/o una acción de embargo del IRS. Consulta con Contador Publico en Miami.

Read More »
financial accounting accounting, balance sheet, statement of financial position, statement of financial condition, balance sheet, Accountant, Accountant in Miami, Accountants in Miami, small business accounting firms, WHAT IS A BALANCE SHEET, How to read a Balance Sheet, HOW TO READ & UNDERSTAND A BALANCE SHEET, The Purpose of the Balance Sheet, Miami accountants, accounting and tax, small business cpa, auditors, small business tax accountants

How to read a Balance Sheet

How to read a balance sheet In financial accounting, a balance sheet or statement of financial position or statement of financial condition is a summary compiled by the Accountant of the financial balances of an individual or organization, whether it be a sole proprietorship, a business partnership, a corporation, private limited company or other organization such as government or not-for-profit entity. Assets, liabilities, and ownership equity are listed as of a specific date, such as the end of its financial year. A balance sheet is often described as a “snapshot of a company’s financial condition”. Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business’ calendar year.

Read More »
accountant, Difference Between LLC and S Corp, Is it best to be taxed as an LLC or Sub S Corporation, LLC, Limited Liability Company, Sub S Corporation, pass-through entities, avoid double taxation, payroll tax, S Corporation, S Corp, LLC vs. S Corporation, C corporations, Management Structure of an LLC, Management Structure of S Corporations, Qualified Business Income Deduction, Limitations on Business Losses

Difference Between LLC and S Corp

For federal income tax purposes, there is no such thing as being taxed as an LLC or Sub S. Both are treated by the IRS as pass-through entities which are business entities in which income is passed through to its owners and taxed at their personal tax rate. This method allows businesses to avoid double taxation and potentially reduce their overall taxes owed. However, a single member LLC is taxed as a sole proprietor and will incur additional payroll tax, unlike Sub S. An LLC is not a corporation, it’s a partnership. Talk to an Accountant before you decide.

Read More »
How to Understand the Cash Flow Statement, Cash Flow Statement, Cash Flow. WHAT IS A CASH FLOW STATEMENT, what are Operating activities and investing activities, what are Financing activities, HOW TO INTERPRET A CASH FLOW STATEMENT, HOW CASH FLOW IS CALCULATED, Cash Flow Statement Direct Method, Cash Flow Statement Indirect Method, accounting period, Positive Cash Flow, Negative Cash Flow, CASH FLOW STATEMENT EXAMPLE, accountant

How to Understand the Cash Flow Statement

In financial accounting, a cash flow statement, also known as statement of cash flows, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in and out of the business. As an analytical tool, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7) is the International Accounting Standard that deals with cash flow statements.

Read More »
Newsletter

Share Page

Close
Scroll to Top