Totally Gross National Product Party Tomorrow!
by josh keller · Published · Updated
Totally Gross National Product are one of the great labels here in Minneapolis, and for the second straight year they are throwing themselves a party where bands on the label and friends will play all afternoon and into the evening. The list of bands (so far) are listed below. Check back for set times.
Spyder Baybie Raw Dog & 2% Muck
Little Dog On Top Of A Big Dog
Child tax credit is $400, but read the rules.
Knight Ridder/Tribune News Service December 21, 1998 | Downing, Neil MoneyLine’s focus last month on a big new federal income tax benefit for families has sparked some follow-up queries.
The benefit is a $400-per-child tax credit that you generally may claim on your federal income tax return for each child you have under age 17.
The issue is timely because the tax forms on which taxpayers may claim the benefit will be mailed in just a few weeks.
Q. In reference to the child tax credit … Some questions were raised as to Catholic school pupils. I imagine that would pertain to them as well?
_L.C., Providence, R.I.
A. Right. It doesn’t matter whether your child is in a public or private school, or if he or she attends school at all.
As long as your child is under age 17 as of Dec. 31, 1998, and you clear a few other hurdles, you’ll be able to claim a credit of up to $400 for each child for 1998, said Barbara C. Shuckra, spokeswoman for the Internal Revenue Service.
Details of the credit are featured in the instructions to the Form 1040 you’ll be getting in the mail. Here’s a quick summary:
_The child must be your dependent. (You must be able to claim the child as a dependent on your federal income tax return.) The child can be your son, daughter, adopted child, grandchild, stepchild or foster child.
_If you’re married and filing a joint federal income tax return, you’ll generally be able to claim the full credit per child if your adjusted gross income is less than $110,000.
_If you’re single, or if your filing status is “head of household” or “qualifying widow(er)” you’ll generally get the full credit per child if your adjusted gross income is less than $75,000. go to site child tax credit 2011
_If your income for 1998 is above the limits listed here, the amount of the credit you may claim will generally be reduced by $50 for each $1,000 in income above the limits.
It’s easy to see why you may have been confused over the rules. Congress has repeatedly tried to liberalize another tax benefit, the Education IRA.
Like the $400-per-child tax credit, the Education IRA was created by the Taxpayer Relief Act of 1997. It generally gives people some tax benefits for saving for a child’s college education. Some members of Congress have tried to let people use the Education IRA to pay for expenses at private elementary and secondary schools.
Q. It’s about the tax credits. What would happen in the case of a $1,000 refund you’re owed. Would you get $2,200 back? Would you be able to claim three dependents and get an additional $1,200 back?
_J.S., Warwick, R.I.
A. Although it has the potential to deliver a lot of money to a lot of people, the $400-per-child tax credit is also a minefield of complexity. Your question helps to illustrate the point, and it’s hard to answer directly, because there are too many variables.
Here’s the general rule: The credit can reduce your federal tax. It may even create a refund for you. But the amount of the credit you claim cannot exceed your regular income tax liability.
What does that mean? Here are some examples that may help:
_Suppose your tax return shows your total federal tax for 1998 is $500 (before applying any credits). Suppose, too, that you’ve had $500 withheld during the tax year (or you paid exactly that amount in quarterly estimated tax payments). Ordinarily, this would mean you wouldn’t have to write a check to the IRS and you wouldn’t be owed a refund, either. But let’s also say that you have one child under age 17 as of Dec. 31, and you meet all the other rules for claiming the $400-per-child tax credit. In this example, you’d get a full $400 credit. This would reduce your $500 total tax, to just $100. And because you already had $500 in federal tax withheld during 1998, you would be entitled to a refund, of $400. In other words, in this example you could use the credit to reduce your federal tax and get a refund. web site child tax credit 2011
_Let’s use the same assumptions as above. But this time let’s say you have two children for which you may claim the credit. Keep in mind, however, that your total federal tax is only $500 (which you already paid, through withholding or estimated payments). As a result, you can use only $500 of your $800 in credits. Why? Because the amount of the credit(s) you can claim cannot be greater than your regular income-tax liability. “Remember: Just because you may be eligible for the credit doesn’t mean you’ll get the full $400 amount,” Shuckra said.
_Let’s use the same example as above, with the same two children. But this time let’s say you hadn’t already paid your $500 in federal taxes through withholding or estimated payments in this example. In other words, you’d wind up writing a $500 check to the IRS and mailing it in with your return. However, because of the credits for your two children, you won’t have to write that check at all. You’ll save yourself $500. (But you won’t also get a refund.) Here are a few other quick points to keep in mind:
As you’ll see shortly, when you get your Form 1040 package, the $400-per-child tax credit is in addition to the tax break you may claim for child- and dependent-care expenses.
But to claim it, you’ll have to shovel your way through a new and complicated worksheet that’ll be included in your Form 1040 package.
Also, bear in mind that the $400-per-child tax credit doesn’t work like the Earned Income Credit. If you have no federal income tax liability at all (perhaps because your income is so low), you can’t use the $400-per-child tax credit to generate a refund for you. “You cannot take this credit (if) there is no tax to reduce,” the IRS says in the instructions to the new Form 1040.
If, however, you have three or more children and you otherwise meet the rules for the credit but can’t use all of it, you may be able to claim what’s known as the Additional Child Tax Credit, using yet another form, Form 8812. The rules are very tricky, so if you think you may be eligible once you get your tax package, contact the IRS or a tax adviser for details.
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X X X (Do you have a question about your money matters? Write to MoneyLine, c/o Providence Providence Journal-Bulletin, 75 Fountain St., Providence, R.I. 02902. We can’t reply personally, but as many questions and issues as possible will appear here.) Distributed by Knight Ridder/Tribune Information Services.