For working-class Americans such as you, tax season can be very confusing. With all the expenses that come from everyday life, you might be worried about owing the IRS money in the end. Not knowing what your tax return will look like can be overwhelming.
That’s why you should pursue every tax credit and deduction possible. One credit you may not realize you qualify for is the Earned Income Tax Credit (EITC).
Not every filing status allows you to claim the EITC. You may quality for this credit under the following statuses:
- Head of household
- Surviving spouse
- Married, filing jointly
You cannot qualify for the EITC is if you and your spouse file you tax returns separately. It may be worth your time to prepare both options to see which works best for you and your spouse.
How children affect EITC
You may qualify for the EITC even if you don’t have children—in which case you could receive a maximum of $519. But if you have children, the financial benefits of claiming this credit can be much higher—anywhere from $3,400 to $6,400.
The most important factor is where your income and family size intersect. To qualify for the EITC, your income cannot exceed a certain amount, but that amount limit depends on how many children you have and which filing status you choose.
If you live on a tight budget, preparing your tax return can be particularly stressful. Finding out whether you can save potentially thousands of dollars via the EITC could make a significant difference for you.