What’s Your Plan? Part 5: It’s Tax Filing Season!
Editor’s Introduction: We’ve all heard the phrase, “Failing to plan is planning to fail”. Variations of this quote have been attributed to Benjamin Franklin, Winston Churchill and Alan Lakein, as well as others. With the New Year upon us, we often start to think of planning, setting goals and accomplishing new things. To start off our Parenting with Altitude blogs this year, we’ve asked several parents and professionals to tell us about their planning efforts in respect to financial planning and resources for their family. We’ll be publishing this series of blogs over the next several weeks with the hope that you’ll find some ideas and inspiration for planning for your family, specifically for your son or daughter with a disability or special health care need. For many working families, the Earned Income Tax Credit is a benefit that goes unclaimed. Read more about how the EITC might fit into your financial planning.
What’s Your Plan? Part 5: It’s Tax Filing Season!
The Earned Income Tax Credit (EITC) is a federal tax credit that has been around for more than 40 years and was created to benefit workers with modest incomes. For example, a married couple with 3 children making $53,000 per year may qualify for the EITC. A single parent with 2 children making $45,000 may also qualify. The EITC survived the recent tax reform bill and continues to receive bipartisan support. This refundable tax credit for working families is worth up to about $6,300; the state of Colorado offers a 10 percent match of the federal EITC as well.
You may be eligible to claim the EITC! Many people who have children with disabilities qualify for the EITC. Generally, you may claim a relative of any age as a qualifying child if the relative is totally and permanently disabled and fits all the other EITC requirements. In addition, families may also be able to claim other child or dependent care expenses credits when caring for a family member with a disability. We always recommend consulting your tax professional or the IRS website If you have additional questions about your eligibility, you can call the Internal Revenue Service toll free number—1-800-829-1040.
Why haven’t I heard about the EITC before? Many people may be missing out on claiming this valuable credit because they just don’t know about it. In Colorado, one in four eligible families doesn’t claim the EITC. The criteria for claiming the EITC is somewhat complicated and many other people who could benefit from it may be missing out because they make below the threshold for filing taxes. But, you won’t know if you qualify, if you don’t file.
What’s the benefit? The biggest benefit of the EITC is that even if a taxpayer doesn’t owe any tax, it gives money back. It is one of the most valuable credits in the tax code, helping families receive thousands of dollars each year to bridge the gap between their income and expenses. Most families use their refund to cover unexpected expenses like medical bills, transportation or increased housing costs. Families who have sons and daughters with special needs may use the refund for equipment, therapy, or other expenses.
To estimate how much you can receive visit—http://www.piton.org/eitc or use the EITC calculator.
Where can I find tax help? Tax Help Colorado operates 29 free tax sites throughout Colorado where you can ask questions about tax credits available to you and have your taxes prepared by an IRS-certified preparer. To qualify for free tax help, you must make $54,000 or less a year. To locate a free tax site near you, call 2-1-1 or visit TaxHelpCO.org for a statewide list of all places providing free tax preparation. Check out this flier to learn more about free tax help, what to bring to a tax site, and how to access free online filing.
How are you planning for your son or daughter? You can share your ideas with us at: p2p-co@yahoogroups.com Be sure to visit The Resource Storeroom for more information on Financial Resources and Planning. Two other helpful resources include: The Arc Future Planning and Wright’s Law Future Planning We also love the resources at Lifecoursetools – these are great visual planning resources to use with your son or daughter to create “a good life” with financial planning included.
