Tax Breaks

EIC (Earned Income Credit)

The EIC is intended to relieve low-income employees of the burden of Social Security taxes. Even if you have no tax due, you may claim this tax credit.

You may be eligible for the EIC if your combined earned and adjusted gross income is less than:

With no qualifying children, the tax is $12,880 ($15,880 if married filing jointly).
$33,995 with one eligible kid ($36,995 if married filing jointly).
With more than one qualified kid, the tax is $38,646 ($41,646 if married filing jointly).

Tax Break for Children

You are entitled to $1,000 for each kid. When your AGI exceeds these limitations, the 2008 Child Tax Credit starts to phase out:

$75,000 if you are single, the head of your household, or a qualifying widow(er).
$110,000 if filing jointly with a spouse
$55,000 if you are married and filing separately

If your income tax is nil and your earned income exceeds $8,500 (in 2008), you may be eligible for the Child Tax Credit.

Savings Credit

A tax credit of up to half of what you put to a qualifying retirement plan or IRA may be available to you. If you fulfill all of the following requirements, you may apply for the Saver’s Credit:

You are at least 18 years old.
You do not attend classes full-time.
You are not claimed as a dependant on the return of someone else.
Your adjusted gross income (AGI) does not exceed $26,500 ($53,000 if married filing jointly, or $39,750 if head of household).

AMT Deduction

If you were subject to the AMT in a previous year but are not subject to it this year, you may be eligible for the minimal tax credit. Up to 50% of the amount carried over to 2008 from prior years may be refunded.

Making a Claim for Overpaid Taxes

If you qualify for any of the aforementioned tax credits, you may recover your money by submitting an amended tax return for earlier years. However, you may only submit an updated return for the previous three years.