The Making Work Pay Tax Credit

The Making Work Pay Tax Credit

Created by the ARRA federal bill with an aim at leading to an economic recovery in the US, the Making Work Pat tax credit is something you should be familiar with when completing your tax return for 2009, according to the IRS. The first thing you will notice is a $400 refundable tax credit for single tax filers and an $800 tax credit for married couples. If your employer has taken the credit out of your withholding already, you will not be eligible for an additional credit.

Use Schedule M if you feel … Read the rest

The Making Work Pay Tax Credit

Created by the ARRA federal bill with an aim at leading to an economic recovery in the US, the Making Work Pat tax credit is something you should be familiar with when completing your tax return for 2009, according to the IRS. The first thing you will notice is a $400 refundable tax credit for single tax filers and an $800 tax credit for married couples. If your employer has taken the credit out of your withholding already, you will not be eligible for an additional credit.

Use Schedule M if you feel you have not already received the credit and want to claim it this tax filing season. You file the 1040EZ, there is a worksheet for line 8, in place of Schedule M, which will allow you to claim the credit directly on the main tax form.

The credit was spread evenly over a shorter period of time in 2009 than it will be in 2010. Therefore you might see some additional withholding in 2010 to compensate. There are some instances were the credit was deducted incorrectly for individual tax situations and you might have received a bigger tax credit during the year that legislated. Review Publication 919 to determine how much should have been deducted from your pay check and how much you will owe when you file your return.

Use the Tax Form that fits You

Use the Tax Form that fits You

Filing your Federal Tax Return requires you to select at least one form, a 1040 form. But there are a number of 1040 forms available depending on the complexity of your return. Here are the criteria to consider when selecting a 1040 form.

The 1040EZ is used when your taxable income is less than $100,000, your are married filing joint or single, you are under the age of 65, not blind, you have no dependents, your income from interest earning accounts produced less that $1,500 during the year, and you do not … Read the rest

Use the Tax Form that fits You

Filing your Federal Tax Return requires you to select at least one form, a 1040 form. But there are a number of 1040 forms available depending on the complexity of your return. Here are the criteria to consider when selecting a 1040 form.

The 1040EZ is used when your taxable income is less than $100,000, your are married filing joint or single, you are under the age of 65, not blind, you have no dependents, your income from interest earning accounts produced less that $1,500 during the year, and you do not plan to take certain deductions.

The 1040A can be used when your taxable income is less than $100,000, you do have some capital gains, you do have tax credits, and you plan to claim an IRA deduction, a student load deduction, an education expense, or a higher education expense.

When you cannot use the 1040EZ or the 1040A, you need to file the 1040 (sometimes called the long form). This happens when your income is greater than $100,000, you want to itemize on Schedule A, you have Self-Employment income, and you have capital gains from the sale of a home. The 1040 long form isn’t as impossible to complete as you might think and tax preparation software like TurboTax will use the form if your situation requires it.