Earned Income Tax Credit

Earned Income Tax Credit

Earned Income Tax Credit

What is Earned Income Tax Credit?

Earned Income Tax Credit or EITC is a mechanism that aims at supporting families with low to medium earnings. It is a refundable credit system that supplements individuals or families if they have been working (either self-employed or working for someone else). On qualification for EITC, one can not only reduce their taxes but also subsequently increase the tax refunds.

There have been some changes to the qualifying income limit for EITC. This means, that even if you did not qualify in the previous years, there are chances you can claim EITC this year. Along with the income limit, the maximum tax credit has also undergone some changes, allowing for higher tax credits. The primary goal of EITC is to keep families away from poverty and also encouraging more individuals and families to work.

Qualifying for EITC

In order to qualify for EITC the adjusted gross income and earned an income of a taxpayer should be below certain limits. The following are the revised limits for the year 2017 for individuals as well as joint filings for married couples.

  • $15010 in the absence of qualifying children ($20600 for married joint filing)
  • $39617 with one qualifying child ($45207 for married joint filing)
  • $45007 with two qualifying children ($50597 for married joint filing)
  • $48340 with three qualifying children ($53930 for married joint filing)

For the first category, the maximum allowed tax credit is $510. It increases to $3400 for the second category, $5616 for the third category and $6318 for the last category.

This means that an individual tax payer, without any dependents and earning less than $15010 is eligible for a maximum tax credit of $510. Similarly, a couple with three children and filing taxes jointly can seek tax credit up to a maximum of $6318.

The adjusted gross income and earned income limits for tax payers for the year 2016 were as follows:

  • $14880 in the absence of qualifying children ($20430 for married joint filing)
  • $39296 with one qualifying child ($44846 for married joint filing)
  • $44648 with two qualifying children ($50198 for married joint filing)
  • $47955 with three qualifying children ($53505 for married joint filing)

Other Criteria

There are certain other criteria that have to be met apart from the cap on income.

  • You, your spouse and dependent children that you are claiming the tax for, should have a valid Social Security Number.
  • You should have some form of income, it can either be self-employed or from employment.
  • You should be a US citizen or a resident for at least year of tax filing.
  • Or you can be a non-resident alien who is married to a US citizen or any other resident alien and opt for joint filing.
  • If you are applying for tax credits, you cannot be the qualifying child of anyone else.
  • Your qualifying child cannot be named in any other EITC filings.
  • If you are filing EITC separately, your status cannot be married.
  • For individuals who do not have qualifying children:
    • You should be more than 25 years but less than 65 years old of age.
    • Should have stayed in the United States for more than half of the years in question for tax filing.
    • Not be listed as qualifying child of anyone else.
  • Form 2555 or 2555-EZ is not accepted.
  • There is a cap on the investment income as well at $3450 for the year 2017, which was $3400 for the year 2016.

Before you file your tax returns, do take some time to check if you are eligible EITC or not. If you are, you can save a decent amount of money using the tax credit system.

The Absolute Cheat Sheet On Register Business in USA

The Absolute Cheat Sheet On Register Business in USA

The Absolute Cheat Sheet On Register Business in USA


When you create a new company or want to take your small business to a new level, there may be several questions related to how Indians register a business in the United States. This is a concept that is not familiar to many companies, since you have only ever registered once, and also retain your status during the period when the business continues.

This general lack of knowledge does not reflect the unimportance of registering a new company, but instead, shows the demand associated with finding a business that will help you in your efforts. The reality of the industry is that the very first step in finding out how Indians register a company in the United States should be to seek expert help to achieve your goals.

When you first make a wise decision related to the registration of a new company in the United States with the help of expert assistance, you will find some topics that need to be considered before actual registration. This begins with the need to realize that your company will be of its structure. There are several different business projects, as well as creating a project unfavorable for your company; it may be unpleasant later in the development of your company.

After using the expert, the second step in how the Indians register the company falls under the definition of individuals who will play an active role in the business. Understanding the number of participants who are active in your business will help determine the appropriate structure for your company.

The third step that follows the development of your company structure is related to the role that everyone will play in the company. With any register of a new company in US education, it is important to create a hierarchy to identify the various responsibilities for which each person is responsible.

When you have a company with five leaders sharing responsibilities and responsibilities, it can be difficult when responsibility becomes a problem.

To register the company in the United States, you are taking the first step towards determining the responsibility of each person and creating a structure that ultimately benefits your business efforts.

A professional used to promote the development of your company can help determine the requirements for what is expected from each person and how it can affect the development of your company.

The definition of structure and hierarchy is only two of several topics that should be considered when studying how to register the company in the United States. With professional help, you create your perfect opportunity not only to register your company but also do not feel any first resistance when creating your new business.

Register a company in the US has never been that easier. These online firms provide a quick and safe method to register the company with very few problems. Online registration companies guarantee that your company will comply with all applicable laws on compliance, and if you are not satisfied with your work, some of you will return your money.

Read more for 5 Wауѕ tо Rеgіѕtеr Your Buѕіnеѕѕ Nаmе in thе USA

Also refer our Ultimate Step-by-Step Guide to New Company Registration in USA


How Far Would I Go Back to Amend My Income Taxes?

How Far Would I Go Back to Amend My Income Taxes?

How Far Would I Go Back to Amend My Income Taxes?

The question of how far can one go back to correct a previously filed income tax return is not only time sensitive but also quite dicey (legally speaking), especially for foreigners living permanently or temporarily in the United States. But before that, let’s put a few things straight.

For starters, an income tax amendment is simply a correction to a return that was filed sometime in the past. Technically speaking, you are allowed to make amendments to a return should you discover deductions or credits that you’re eligible to (but which you missed during the original filing process). The ball rolls both ways, however.

You’re also required by the law to amend your tax return if you discover that you hadn’t included a part of your annual income while filing the original tax returns.

And if any of these amendments result in any changes to your federal taxable income, you’re also legally obligated to file an amendment for your annual state tax return as well.

That being said, the gavel is struck differently for different tax brackets as far as how far one can go to correct a filed return. Here’s a quick primer on that.

1. Federal Taxes

Generally speaking, federal taxes can be amended as far back as three from the original due date of the return. Note that ‘the original due date of the income tax return’ is not the same as the ‘original tax year.’ In addition to making amendments to changes in the deductions, credits, and general income, you can also amend your previously filed return to omit or add new dependents. You can also change your filing status from ‘single’ to ‘married’ or vice-versa as long as you weren’t filing jointly with your previous spouse.

2. State Taxes

Some states will impose income tax on their residents. In such a case, you’re obligated to file a new state return if any changes made in the federal tax amendment will result in alterations in the resultant federal taxable income. Like federal taxes above, you usually have three years from the original due date of the previously filed state return.

3. Substitute Returns

A substitute return is basically an income tax return the state or the IRS will prepare for you. This is quite common among foreigners especially when the taxing authority receives income documents from your employer/any other third party without an accompanying tax return from you for the same tax year. The IRS or the concerned state taxing authority will then use the income document to prepare a tax return. As it often happens, the taxing authority will miss any eligible deductions or list an incorrect filing status. If this happens, you can request an amendment to the previously filed substitute tax return at any time. There are no time limits whatsoever on how far this can go.

In Closing: How to Order Income Documents

Just as the IRS or any other stately taxing authority will use your income documents ( sourced from your employer ) to prepare a personal substitute return for you, you too can also make use of the same information to verify/proof that you’ve included all your qualifying income when making an amending a return. You can order these docs by completing one IRS Form 4506-T then checking the box found on line 8. You should receive a transcript showing the companies you’ve worked for, the amount of money earned and, of course, any taxes that were withheld from your previous payments/earnings.

Read more about When You Can File an Amended Tax Return.


Guide to Starting a Business in the USA – Ease Your Business Journey

Guide to Starting a Business in the USA – Ease Your Business Journey

Guide to Starting a Business in the USA – Ease Your Business Journey

To many, the US is the ultimate business destination. It is the land of opportunities and many people will not let the chance to start a business in the USA, pass them by. However, starting a business in the US is not an easy task, especially for individual entrepreneurs and foreign investors. The numerous bureaucracies that budding investors have to fulfill does not make things any better. Nonetheless, the existence of business incorporation services has made matters easier for aspiring entrepreneurs. By enlisting the services of a reputable firm, an entrepreneur does not have to undergo the rigorous paperwork that comes with starting a venture. Here is a simple guide for entrepreneurs seeking to establish a business in the USA.

Business Name Registration

A business name is paramount when establishing a business entity in the USA. In essence, it provides a legal identity to the business. Registering a business name entails a number of processes. Start by choosing an appropriate name that goes along with your line of service. You will have to carry out a name search to ensure that your business name is available for use. Trademark infringements can cost your business a lot in terms of lawsuits and fines. After choosing a unique name, you have to register it and patent your trademark with the state or local government agencies. The simplest way to register a business name is to file a Doing Business As.

Click here to know 5 Wауѕ tо Rеgіѕtеr Your Buѕіnеѕѕ Nаmе in thе USA

Obtain a Certificate of Business Formation

Whether you are starting a sole-proprietorship or a corporate company, obtaining a certificate of business formation gives you the legal authority to get your business up and running. This certificate indicates the legal structure of your business, and it will come in handy when handling your legal obligations or when seeking financial assistance.

Obtain a Federal Employer Identification Number

A Federal Employer Identification Number is a unique serial number that the Internal Revenue Service issues to businesses for the purposes of tax filing and reporting. It is a compulsory number that you must acquire, to comply with the tax laws of the land. The IRS uses this number to establish if you have fulfilled your tax obligations.

Why hire a Business Incorporation Service

Let’s face it!
Going through the process of registering a business or establishing a subsidiary in the USA or any other country is usually not easy. Hiring a business incorporation service is a viable way of starting a business without much hassle. Here are the benefits of incorporation services:
• It is not compulsory for entrepreneurs to understand any legal aspects. The incorporation service handles all the paperwork and legal requirements.
• Hiring an incorporation service saves time, allowing you to concentrate on getting your business up and running.
• You will receive frequent notifications and updates from the incorporation service about any legal requirements
• Round the clock assistance with any business information you may require to help propel your business.
If you are seeking to start a business in the US, then it is important that you enlist the services of a reputable business incorporation service. Advantage One is a company that provides business incorporation and consulting services. The company has vast experience in helping individual entrepreneurs, small business owners and existing business corporations establish their enterprises in the USA. We will handle all the paperwork, allowing you to concentrate on running your business. For more information,visit our website or call us today!!

Know the Easiest Way to Incorporate Your Business


5 Cоmmоn Mіѕtаkеѕ while Incorporating Yоur Cоmраnу

5 Cоmmоn Mіѕtаkеѕ while Incorporating Yоur Cоmраnу

Dоublе – Chесk: 5 Cоmmоn Mіѕtаkеѕ while Incorporating Yоur Cоmраnу

Inсоrроrаtіng a company is a great wау tо рrоtесt уоurѕеlf. Incorporation сrеаtеѕ a dіѕtіnсt lеgаl еntіtу that іѕ separate frоm its оwnеrѕ. Aѕ opposed tо a partnership оr sole proprietorship, incorporation limits еасh оwnеrѕ’ реrѕоnаl lіаbіlіtу for аnу buѕіnеѕѕ dеbtѕ. Nо реrѕоnаl аѕѕеtѕ would be оn thе lіnе, protecting valuables ѕuсh аѕ уоur home оr car.

Hоwеvеr, thе рrосеѕѕ оf іnсоrроrаtіng a business is соmрlісаtеd. It’s еаѕу tо make a mіѕtаkе that could end up соѕtіng уоu thousands.

Hеrе аrе fіvе common mіѕtаkеѕ соmраnіеѕ make whеn incorporating аnd hоw to аvоіd thеm:

Hiring a lаwуеr tо fіlе the fоrmѕ:

Yоu don’t actually nееd tо hire a lаwуеr to fоrm аn LLC оr Cоrроrаtіоn. If уоu’vе gоt a straightforward ѕіtuаtіоn, you саn use a lеgаl dосumеnt filing ѕеrvісе tо rерrеѕеnt уоurѕеlf tо сrеаtе a buѕіnеѕѕ еntіtу. Of соurѕе, іf уоu have a раrtісulаrlу соmрlеx раrtnеrѕhір оr fіnаnсіаl ѕіtuаtіоn, уоu ѕhоuld ѕееk thе соunѕеl оf аn аttоrnеу.

Choosing thе wrоng buѕіnеѕѕ еntіtу

Sоmе оf the most соmmоn buѕіnеѕѕ еntіtіеѕ іn Sіngароrе іnсludе Lіmіtеd Liability Cоmраnу (LLC), ѕоlе рrорrіеtоrѕhір and partnership fоrmѕ. Dесіdіng on thе right tуре оf buѕіnеѕѕ еntіtу depends оn thе ѕіtuаtіоnѕ аѕ wеll аѕ the рlаnѕ уоu have for уоur company. Mаkіng the wrong сhоісе of еntіtу саn lеаd tо taxation рrоblеmѕ and other соmрlісаtіоnѕ.

Inсоrроrаtіng wіthоut the Required Business Lісеnѕеѕ:

Incorporation is not thе ѕаmе аѕ business license. It іѕ imperative fоr buѕіnеѕѕеѕ tо рrосurе еіthеr a lосаl, ѕtаtе оr a federal lісеnѕе. Thеrеfоrе enquire about the kіnd оf lісеnѕе rеԛuіrеd fоr уоur company. Buѕіnеѕѕ licenses are uѕuаllу inexpensive hеnсе іt іѕ іdеаl tо secure оnе so as tо аvоіd hеftу fіnеѕ bеіng imposed upon уоu іn the futurе.

Chооѕіng thе Wrong Cоrроrаtе Name:

Thе nаmе уоu choose must have аlrеаdу bееn tаkеn bу a dіffеrеnt соmраnу, thus putting you at rіѕk of trademark іnfrіngеmеntѕ. Hеnсе mаkе sure that thе name you сhооѕе for your buѕіnеѕѕ іѕ unique аnd lеgаllу binding.

Nоt ѕtауіng соmрlіаnt:

Your оblіgаtіоnѕ aren’t оvеr оnсе уоur аррlісаtіоnѕ are in аnd your LLC оr Cоrроrаtіоn іѕ formed. Keeping your LLC оr Cоrроrаtіоn іn соmрlіаnсе is absolutely critical, and it’s a nеvеr-еndіng jоb. If a рlаіntіff ѕhоwѕ thаt уоu hаvе nоt mаіntаіnеd your LLC/соrроrаtіоn tо the lеttеr оf thе lаw, уоur ‘соrроrаtе shield’ can bе ріеrсеd аnd your реrѕоnаl assets are vulnеrаblе. Sо how do уоu mаkе ѕurе уоur corporation ѕtауѕ compliant?

  • Keep уоur реrѕоnаl fundѕ ѕераrаtе from thоѕе of the business (no соmmіnglіng: thіѕ mеаnѕ kееріng a ѕераrаtе bаnk account аnd сrеdіt card)
  • Send іn уоur Annual Stаtеmеnt/Annuаl Rероrt оn tіmе, аѕ required bу уоur ѕtаtе of іnсоrроrаtіоn
  • File for fоrеіgn ԛuаlіfісаtіоn іf уоu’rе operating in аnу state(s) оthеr thаn уоur state of іnсоrроrаtіоn
  • Keep thе state up tо dаtе wіth аnу kеу changes tо уоur business bу ѕеndіng іn Articles оf Amendment
  • Dоn’t еngаgе in аnу form оf frаud.

Click here to read about top mistakes small business owner make when starting a Business.