Low and Moderate-income earners with and without dependent children are eligible to benefit from the Earned Income Tax Credit, also known by its acronym EITC.
Certain requirements must be met to qualify for EITC such as filing a tax return irrespective of whether you are legally required to do so. If you are eligible the EITC gives you a tax credit by reducing the tax amount you owe or increasing your refund for the applicable tax year.
Am I Eligible as an Individual in Denver for EITC?
Qualifying for the EITC is based on some requirements. To begin with, a person applying for EITC must have earned income from either operating a business or farm or working directly for someone who does (W-2 income). Taxpayers whose sole income is unearned (such as investment income) and whose businesses had a loss for the year are ineligible for the EITC.
An IRS Enrolled Agent, like myself, is a good resource to assess your business and personal tax situation and advise you whether you meet these criteria.
The first step in claiming EITC is filing a tax return. To qualify for the EITC your income must be below a certain amount that varies based on your filing status and the number of children in your household.
The most common errors that you should watch for and avoid are filing EITC returns containing errors and having EITC claims that were declined in a previous tax year.
The truth is that all these can “be Greek” to someone who is not used to the strict procedures and regulations of the IRS Code. That is where IRS licensed Enrolled Agents, such as myself, come in to help you in handling all these procedures and ensure errors are not made when filing your tax returns. By relying on IRS Enrolled Agents like myself when claiming EITC, you reduce the probability of your claim being declined.
What to Do If You Receive an IRS Letter?
The IRS will occasionally send letters in regards to EITC claims. For instance, they will send you a letter asking you to verify some information concerning your EITC claim. My advice is that you should always consult a knowledgeable person, such as an Enrolled Agent, to clarify what you need to do and provide with your response.
As an IRS licensed Enrolled Agent, I can help interpret the letters for you and ensure you avoid mistakes that can lead to hefty penalties resulting from incorrect EITC claims.