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1 in 5 American households that are eligible for the Earned Income Tax Credit (EITC) don’t claim it on their tax returns.


8 common tax mistakes that can cost you hundreds

Source is 8 common tax mistakes that can cost you hundreds: http://businessinsider.com/8-common-...

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A lot of Americans are leaving a lot of money on the table:

One in five households that are eligible for the Earned Income Tax Credit don’t claim it on their tax returns, a large enough number that the IRS has created an EITC Awareness Day each year for this specific credit. This EITC credit is worth up to $6,242 for taxpayers with three or more qualifying children and earned income up to $53,267. 

The credit is also refundable, which means that you receive the credit even if it’s more than the tax on your income, says Perlman. 

For example, if the tax on your income equals $2,000 and you have a refundable credit of $3,000, then you get a $2,000 credit toward your taxable income (reducing it to zero) plus $1,000 as a refund. That $1,000 would be lost if the credit was non-refundable.

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