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    Spread the Word about the Earned Income Tax Credit!

    Friday, January 25th, 2013

    The Earned Income Tax Credit (EITC) can help eligible workers save up to $5,891 on their 2012 federal tax returns, and even more if you live in a state with a similar state credit. Yet only 1 in 5 people eligible for the credit actually claim it. In order to receive the credit, you must file a federal tax return, even if your income is below the federal tax return filing requirement. The good news is that this can be done for free by visiting the IRS website at www.IRS.gov/freefile to download free tax preparation software, or by visiting a VITA (Volunteer Income Tax Assistance) location near you. For more information about free tax preparation help and to find a VITA location near you, click here.

    You may qualify for EITC if you worked any part of last year and earned $50,000 or less. How much you receive depends on your family size, income, and a few other factors. The savings can be significant. The average savings last year was over $2,200.

    Families that have received the credit have used it to buy goods necessary to keep their family afloat during these hard economic times. One mother used her credit to buy a sewing machine so that she could make her children’s clothes at home rather than spend money buying them. Other parents have used the credit to put their children in extracurricular activities that used to be provided by the schools.

    Single people can also benefit greatly from the credit, using the money to supplement their income. Remember, you only have to have worked part of the year to be eligible for the credit, meaning that if you were laid off at some point last year, you still qualify. This credit can help you during your time of unemployment. One woman was able to use her credit to start taking online college courses and is now close to finishing her college degree.

    The Earned Income Tax Credit is an underutilized tool that helps individuals and families better their financial situations. Studies have found that the EITC encourages work, reduces poverty, helps families meet basic needs, and improves children’s achievement in school and likely increases their earnings as adults. A 2011 study found that the majority of people who recieve the credit do so for only one or two years before their income increases enough to disqualify them from receiving the credit again.* This shows how useful the Earned Income Tax Credit can be to individuals and families that are working hard to increase their financial security.

    Help WISER spread the word about the Earned Income Tax Credit to your family, friends, and community. You earned it. Now claim it!

    To help spread the word, you can download resources at EITSoutreach.org.

    Tax Credits for Working Families has even more information on both federal and state tax credits.

    You can also share this IRS video about the Earned Income Tax Credit with your family and friends.

    *Tim Dowd and John B. Horowitz, “Income Mobility and the Earned Income Tax Credit: Short-Term Safety Net or Long-Term Income Support,” Public Finance Review (September 2011), 619-652

    Posted in EITC | 1 Comment »

    Stick to Your Financial Resolutions, One Month at a Time

    Thursday, January 17th, 2013

    At the start of a new year, we often set financial goals for ourselves. But many times our financial resolutions can be intimidating, even overwhelming, and sometimes it is hard to sustain our good financial intentions over the entire year. To help break down these financial goals into more manageable pieces, read WISER’s fact sheet “12 Helpful Tips for 2013.” In this fact sheet, we cover some of the most important financial steps women can take. If devoting an entire year to trying to keep up with all of them sounds challenging, we encourage you to tackle at least one a month. By the time 2014 rolls around, you will have taken 12 important strides in achieving financial and retirement security.

    Posted in EITC, Investing, Retirement Planning, Savings | Comments »

    It’s National Save For Retirement Week! Today’s Topic: Money Management and Saving Tips

    Thursday, October 25th, 2012

    It’s National Save for Retirement Week 2012! A week dedicated to building knowledge and taking action toward securing your retirement. Each day this week we are going to look at a different contributing factor to retirement and help you increase your understanding of it so that you can take action and be prepared. Today we are looking at money management and saving tips.

    Money management is critical to being able to save for retirement, or any financial goals you want to achieve.  But managing your money can be difficult.  Even when we make a budget, it is easy to get sidetracked by unexpected expenses or even just temptations to spend money on things we may not really need.  Successful money management requires discipline, but it also requires the basic know-how’s for creating a budget, managing debt, and avoiding costly mistakes.

    The first step in managing your money is tracking your income and expenses, seeing where your money is being spent, and making a budget that helps you live below your means so you have money available to save.  Use WISER’s Budget Worksheet to help you get started, and check out our Money Management fact sheet. For some tips on how to keep track of your spending click here.  If debt is a big obstacle getting in the way of your ability to save, also look at our resources on debt and credit.

    In order to manage your money effectively, it is also a good idea to know about some common money mistakes that women often make.  These mistakes can be costly! Read about 5 Money Mistakes Women Should Avoid and 5 Money Mistakes Women In Couples Should Avoid.

    Finally, managing your money is also about finding new ways to save. There are a number of tax credits that exist that too few people take advantage of. The Saver’s Tax Credit is a relatively new credit that helps individuals save for retirement through a federal government match for retirement contributions you have made to your retirement accounts. To learn more about this credit read WISER’s Federal Saver’s Tax Credit fact sheet.

    There is also the Earned Income Tax Credit (EITC). This credit is one of the most beneficial tax policies for low-income families. It is a refundable federal income tax credit for individuals and families who work and meet certain requirements. To be eligible for the EITC, you must have earned income, which must be below a certain limit depending on how many qualifying children you have. For more information read our Earned Income Tax Credit fact sheet.

    If you want to read more on money management, there are some great additional resources on WISER’s Saving & Investing web page.  Join us tomorrow for our week’s final post to learn some important things about managing your money once you are in retirement.

    Posted in Budget, EITC, Savings | Comments »

    Earned Income Tax Credit (EITC) Awareness Day 2011

    Friday, January 28th, 2011

    Did you know that you could be eligible to get as much as $5,666 back from the IRS this year when you file your taxes? If you qualify for the Earned Income Tax Credit (EITC), this could apply to you.

    The EITC is one of the most beneficial tax policies for low-income families today. It is a refundable federal income tax credit for individuals and families who work and meet certain income requirements. The actual amount of the credit varies depending on income, marital status and number of children, if any.  If you did not qualify in the past, you may qualify now if your financial, marital or parental status changed in 2010.

    In honor of EITC Awareness Day, take the time to see if you qualify for this additional credit this year. The EITC can provide a once-a-year opportunity for you and your family to access extra income that can be put into a savings account or other savings vehicle of your choice, while still allowing you to maintain the same budget.

    Here are some helpful fact sheets and websites to help you learn more and determine if you are eligible for EITC this tax season:

    Posted in Budget, EITC, Savings | Comments »

    What is the Earned Income Tax Credit and how EITC can benefit you?

    Thursday, February 4th, 2010

    The Earned Income Tax Credit (EITC) is a refundable federal income tax credit designed for low to moderate income working individuals and families. It was originally approved by Congress back in 1975 as a means to offset the burden of social security taxes and to provide an incentive to work, however currently this credit has the ability to lift many struggling American families above the poverty line.

    To find out if you qualify for the EITC ask yourself if you meet the following IRS listed requirements:

    ·You must have a valid Social Security Number

    ·You must have earned income from your job, working for yourself or another source.

    ·Your filing status cannot be married, filing separately.

    ·You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.

    ·You cannot be a qualifying child of another person.

    ·Cannot file Form 2555 or 2555-EZ (related to foreign income)

    ·You can have only limited amount of investment income

    Preview of 2010 Tax Year

    Additionally in order to qualify you must be within the following income brackets:

    Earned income and adjusted gross income (AGI) must each be less than:

    • $43,352 ($48,362 married filing jointly) with three or more qualifying children
    • $40,363 ($45,373 married filing jointly) with two qualifying children
    • $35,535 ($40,545 married filing jointly) with one qualifying child
    • $13,460 ($18,470 married filing jointly) with no qualifying children

    Tax Year 2010 maximum credit:

    • $5,666 with three or more qualifying children
    • $5,036 with two qualifying children
    • $3,050 with one qualifying child
    • $457 with no qualifying children

    *The American Recovery and Reinvestment Act (ARRA) provides a temporary increase in EITC and expands the credit for workers with three or more qualifying children. These changes are temporary and apply to 2009 and 2010 tax years.

    To learn more about the EITC and how you might qualify for a tax credit please visit the IRS’ EITC home page at http://www.irs.gov/individuals/article/0,,id=96406,00.html

    Posted in EITC | Comments »

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    WISER

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    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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