Earned Income Credit-Make Sure you are Getting your Money
We are right in the midst of tax season, and people often have many questions about what they can and can’t do with their tax refunds. Well, tax refunds are often a source of funds to pay on bigger purchases or pay off debts. If you are contemplating a bankruptcy, you should not make a large purchase or pay on old debts with your tax refunds without first consulting a bankruptcy attorney.
Tax refunds consist on many things, including refunds of taxes paid, credits against those taxes, and sometimes even refundable credits. A refundable credit is one that workers can get money back even when no taxes have been withheld. In order to get these refundable credits, a tax return must be filed.
One such refundable credit is the earned income credit. The earned income credit has often been misconceived as for only working families. However, it is available to people without children who have a very limited income also. (see “Childless adults qualify for earned income credit, too” (Detroit Free Press, by Susan Tompor, February 4, 2015). It is a smaller credit for those without children, but it should not be overlooked. The earned income credit is fully exempt under Nebraska law and can provide for a source of savings, even when considering bankruptcy options.
Taxes play an important role in bankruptcy analysis, whether you owe back taxes, are getting a refund, are worried about prior untimely filing of tax returns, or other tax issues; these are all things you should discuss with the bankruptcy attorneys at Pollak Hicks & Alhejaj. We can assist you with bankruptcy planning or debt negotiation, protecting tax refunds to the maximum extent and planning for a fresh start to your debt problems.
© Roxanne M. Alhejaj, Attorney at Law