Make Your Taxes Work For You With These Commonly Missed Tax Credits
(StraightNews.org) – Many times, filing your taxes can be highly frustrating. You want to ensure you get the largest refund available to you, and missing credits that can boost your yearly income can cause problems. Several tax credits are available to low-income families, but many are unaware of them. If you want to increase your tax refund, keep reading to learn more and learn some tips to help maximize your return.
Tax Credits for Low-Income Families
In 2022, several tax credits to watch out for were introduced.
The Child and Dependent Care Tax Credit was substantially increased for 2021. You can claim dependent care expenses up to $8,000 for one dependent or $16,000 for two or more. You can receive a maximum of 50 percent of those expenses as part of your tax refund. Claiming your child care costs can make a significant difference for struggling families.
The Expanded Child Tax Credit offers parents up to $3,000 for children aged 6 to 17 and as much as $3,600 for children five and under. Parents making $75,000 or less individually or those with a combined income of $150,000 or less may qualify for this credit.
The Earned Income Tax Credit offers a tax break worth up to $1,500. The EITC payment is available to all Americans 19 years or older. Workers without children will be eligible if they earned less than $21,430 in 2021. Some states offer additional EITCs, so make sure you check out your state’s eligibility requirements when filling.
If you did not receive your stimulus payments, you could claim the Recovery Rebate Credit, which can help you get much-needed funds that you did not receive during the height of COVID-19. The third round of stimulus payments offered much as $1,400 a person, and each household member may qualify. Even though the tax deadline has passed, anyone who filed an extension can still claim this credit before the October 17 extension date.
If you made a charitable contribution in 2021, you can claim as much as $600 as part of your deduction.
Self-employed individuals who took sick time off during Covid-19 can help decrease their tax burden by claiming this time. If you missed time while recovering from Covid-19, cared for an afflicted family member, or had children out of school due to closures, you may be able to claim much of the lost wages as a tax credit. Check Form 7202 if you need more information.
Government Assistance Programs for Low-Income Families
In addition to the above tax credits, you may be able to take advantage of government assistance programs that may help you afford everything from rent to child care. You can even use your tax return to prove your required income for these programs.
TANF: Temporary Assistance for Needy Families assists with housing, child care, food, utilities, and job training.
SNAP: The Supplemental Nutrition Assistance Program is designed to help struggling households afford healthy food while allowing them to focus funds on other expenses.
CHIP: The Children’s Health Insurance Program is designed for families who cannot get Medicaid but don’t make enough to afford private insurance coverage. Contact your state agency to learn more about specific eligibility requirements and benefits.
If you rely on your tax refund to catch up on your current expenses, applying for these credits may be your best option. File as early as you can to get a good idea of the size of your refund (and get it sooner). These tips allow you not only to access the tax credits available to low-income households; they may even help increase the amount of your tax refund.
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