File Tax Help

An Easy Tax Relief For Qualified Citizens – Earned Income Tax Credit (Eitc)

Owning a home opens the door to a plethora of tax-saving opportunities, and there are a literally dozens of tax breaks that homeowners should leverage. So, too, should the enrolled agent as the registered tax return preparer working on their behalf. The rule of thumb, as enrolled agents know from the EA examination and tax CPE, the enrolled agent continuing education courses required for ongoing certification, is that homeowners are required to file Form 1040, and any itemized deductions (including those specifically for homeowners) must be indicated on Schedule A. Even if a taxpayer itemizes, and cannot take the standard tax deduction, there still are several tax credits and exclusions that they are able to take whether or not they itemize. Many homeowners are in the dark when it comes to this, and it is the responsibility of enrolled agents make these deductions known, along with the fact that they may also be able to amend previous years' returns if these deductions were previously unclaimed.

This tax credit was originally introduced by Congress in 1975 through legislation and the original intent of this credit was to provide some form of offset to the Social Security taxes for the lower income earners. There are various guidelines and rules that apply to this tax credit. Some of these rules are provided below:

For you to be considered for this tax credit, you need to have specifically requested for it. You can do this by indicating the request at the Schedule EIC (Earned Income Credit) of the Form 1040. You can also apply electronically through the IRS website as you make your e-file submissions. For you to qualify for the tax relief, you must have made some sort of "earned income" in the year at question.

The credit from the EITC is not a flat figure, but varies depending on the number of dependants and income level among other factors. However, the amount credited has a maximum of $5,666 with the 2010 average falling at $2,100. In 2010, about 80% of the people who applied for the tax credit qualified and received a refund or deduction equivalent to the credit.

Property Tax Homeowners can also take state and local property taxes as an itemized deduction. It is important to note, however, that, unfortunately, the previous option of taking up to $500 ($1,000 for joint filers) as an additional standard deduction for real estate taxes expired at the end of 2009 and was not renewed for 2010. Rentals When taxpayer's residence is rented for less than 15 days a year, the rental income can be excluded from gross income. As a result, no deductions attributable to such rental are permitted.

IHT Exemptions It is sometimes possible to reduce the amount of the IHT payable, or avoid paying it even when your assets are above the IHT threshold through exemptions and reliefs that include: * Donations to UK-registered charities and donations to some political parties - Gifts made to UK charities during your lifetime or in your will are exempt. * Annual and small gift exemptions - You can give away up to 3,000 each year tax-free and give away additional small gifts of up to 250. * Wedding and civil partnership gifts - Tax-free gifts for weddings and civil partnerships range from 1,000 to 5,000. * Potentially exempt transfers - Gifts made more than seven years before the deceased's death can also be exempt from IHT, regardless of the value of the gift.

Green Incentives Homeowners who installed energy-efficient by December 31st of 2010 may be eligible to claim a 30 % tax credit worth as much as $1,500. The American Recovery and Reinvestment Act of 2009 extends energy tax credits to homeowners who have installed energy-efficient exterior windows and doors, furnaces, air conditioners and water pumps.

You can for example give your assets to trust funds or to a discounted gift trust which can ensure a stable income throughout your life.

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