Here’s the tax break the IRS is begging you to take
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Most Americans’ goals during tax season are to pay as little tax as possible, and ideally to get a refund that’s as large as you can get. Unfortunately, preparing taxes is complicated, and the complex laws governing taxation are so challenging to navigate that many taxpayers end up not claiming tax breaks that could put thousands of extra dollars in their pockets.
It might come as a surprise to learn that the IRS actually wants to encourage taxpayers to take tax breaks, but that’s exactly what it did on Jan. 31. With the 14th installment of its annual EITC Awareness Day, the tax agency wants to make sure everyone knows about the benefits of claiming the earned income tax credit – a tax break that it believes 6 million eligible taxpayers leave untouched.
How does the earned income tax credit work?
The earned income tax credit helps workers with modest income levels save on their taxes. For the 2019 tax year, credit amounts can be up to $6,559 for taxpayer families with three or more children, and smaller limits of $5,828, $3,526 and $529 apply to those with families of two, one or no children, respectively. Below, you’ll see the income limits that apply to the credit for 2019, putting an upper bound on how much money you can make and still receive a portion of the credit amount.