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Financial Planning / Tax Strategies
|Subject: Venting about Earned Income Tax Credit||Date: 5/22/2012 6:51 PM|
|Author: stevenjklein||Number: 116171 of 120410|
Last year, when I filed our 2010 taxes, the EITC got us a "refund" of over $5K on our federal tax bill. (I put refund in quotes, because it wasn't actually a refund. It was a gift, for which I gratefully thank all the US taxpayers.)
For tax year 2011, our AGI was virtually unchanged, but to make ends meet I sold some stocks, earning about $4K in profit.
The result (as you tax pros already know) is that we didn't qualify for the EITC, and instead had to pay taxes.
What I learned was this: If a taxpayer's investment income exceeded $3150 in 2011, that taxpayer can't claim the EITC.
Unfortunately, by the time I learned this, I'd already made the same mistake this year.
(I suppose I might not have made this mistake if I'd consulted a qualified tax professional before making my stock sales. But then, if I could afford to pay a qualified tax professional, I'd probably wouldn't be poor enough to qualify for the EITC anyway!)
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