
Missed the tax deadline? Here’s what you should do
If you haven’t filed your taxes yet, don’t panic — but act fast.
Heard of the earned income tax credit but aren’t sure what it means? Bankrate explains.
The earned income tax credit is a tax credit targeted at low- to moderate-income taxpayers. The purpose of the tax credit is to encourage people who work in low-wage jobs to keep working and avoid relying on social services or welfare.
Taxpayers who meet the eligibility requirements for the earned income tax credit file standard tax returns like everyone else. The Internal Revenue Service (IRS) then reduces the amount of tax each qualifying person owes and transfers the amount to their tax refunds.
Eligible taxpayers must have earned an adjusted gross income that falls within limits set by the IRS for the tax year. They also must meet basic rules, which include the following:
Taxpayers must also meet additional requirements, depending on whether or not they have qualifying children at home. Spouses who do not have children must be between the ages of 25 and 65 during the tax year and not be claimed as a dependent on another person’s tax return. They also must live in the U.S. for at least six months of the year.
Children must be younger than 19, but those enrolled in school may be as old as 24. They must live with the taxpayer for at least six months during the year, and they may not file a joint return for the tax year.
Having trouble with taxes? Visit Bankrate’s tax center to answer all your tax questions
A taxpayer with one qualifying child in the 2016 tax year received up to $3,373 as a tax credit. Ezekiel earned $30,000 during the 2016 tax year, and after accounting for all deductions, he had a tax bill of $2,810, but paid $4,500 in income tax payroll deductions. Ezekiel qualified for the maximum earned income tax credit, and received a tax refund of $5,063.
If you haven’t filed your taxes yet, don’t panic — but act fast.
Typically, taxpayers have two options: Take the itemized deductions or take the standard deduction.
Regardless of what may cause a person to miss the tax-filing deadline, there are potential consequences.
Applying for more time to file your taxes is easy. Just don’t put off paying your tax bill.
The fast-approaching deadline for filing your 2021 taxes is April 18, 2022.
There are seven tax brackets for most ordinary income: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
The credit was confusing even before Congress revamped it for 2021.
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