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Filing taxes is a serious matter and it shouldn’t be taken for granted that’s why you should know a huge amount about tax filing and the types or credit it offers. Read out to know more about different types of credits you should be aware of before filing taxes.
Different Kind of Credits you Should be Aware of While Filing Taxes Filing taxes is a serious matter and it shouldn’t be taken for granted that’s why you should know a huge amount about tax filing and the types or credit it offers. Here are the different credit types: 1. Social Security Credit- if you are starting to work for a job that offers Social Security benefits then you’ll start earning Social security credits as well. All your wages will be put on your record and it will determine the amount of a person’s credit. The credits that you earn will help you get your retirement, disability or survivor benefits when you retire. For you to better understand how this works this is how it goes. Every year, you can earn up to 4 credits a year with every $890 of what you earn. And don’t worry, even if you change your job or even if you do not have one, these credits will stay in your credit reports and won’t get affected no matter what. Here are the necessary requirements for the different benefits: You will need 40 credits to earn get your retirement benefits The number of credits you will need for disability benefits will depend on your age and usually, people under 24 will need 6 credit points but anything above that will vary with age. For survivor benefits, it will depend on an individual’s birth year, people born on or before 1929 will need one credit for every year after 1950 till their death or for those after 1930. Another credit is needed for every year after 21 till their death. Eligibility for Medicare will also depend on the amount of Social Security credits you have. As soon as you retire, you will start receiving Social Security benefits as soon as possible. But if you delay the benefits, you will get a social security of 5.5% for ever time you delay the payments 2. Earned Income tax credit- this is actually a relief for the working or for people with low- income from the Social Security tax. All of the excess amount that will exceed the taxpayer’s liability will be refundable. Single or married people who either worked full- time or part-time can qualify for the EIC but depending on their income. Only children who are 19 and below and who are living with you will qualify for this credit. 3. Education credits- Education credits will provide up to $1,500 per person/student as a direct reduction on your taxes. 4. HOPE credit- you can get this on the first two years of secondary education of a dependent person. You can get a 100% on the first $1,000 of the tuition and other miscellaneous fees and another 50% for single individuals. Or you can get $80,000- $100,000 for married individuals. This cannot be claimed by couples who are filing separately. In the tax season, do you also follow up the tax refund tips? Well, tax season is always a critical season and therefore it is important that you keep check on your free credit report to be prepared with a good financial backup.
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