Mar 12, 2010 8:11 PM
Tax time is just around the corner! This year, there is a new Making Work Pay tax credit. Anyone who has an earned income is eligible to file, but CPA Tommy Irvine says it can be easy to overlook if you are filing your taxes on paper instead of online. "Just because it's a new credit, and there is no catch. With the e-file they're rejecting it and saying you should have claimed the credit, but if it's paper, it goes to them and it's just a longer process."
Individuals can get up to four-hundred dollars from the credit or eight-hundred for those who are married filing jointly. If you make more than seventy-five thousand dollars or one-hundred-fifty thousand for joint filers, then the credit is reduced. To qualify for the maximum amount of the Making Work Pay credit, you must earn at least sixty-five hundred dollars. If you make more, the credit will be less. To claim this credit, you need to complete the schedule M Form when you file your taxes. "The schedule M is the schedule that gets attached to the 1040 and it breaks down the amount of the credit, it is what you use to calculate how much of the credit you are able to take," Irvine explained.
There are a few things to be aware of. If you're single and work two jobs or are married, filing jointly and have two incomes, you may be underwithholding and could end up paying Uncle Sam instead of getting a refund. "We found a lot of people who are receiving small refunds are starting to owe and people that we're receiving larger refunds are getting a little smaller refund," Irvine stated.
If you receive social security benefits, your credit could be also reduced. If you already filed and forgot the Making Work Pay tax credit, you can alway ammend your return and claim it.