- Filing status
- Choose your filing status. Your filing status determines the
income levels for your Federal tax bracket. It is also important
for calculating your standard deduction, personal exemptions, and
deduction phase out incomes. The table below summarizes the five
possible filing status choices. It is important to understand that
your marital status as of the last day of the year determines your
filing status.
| Filing Status for 2007 |
| Married filing jointly |
If you are married, you are able to file a joint return with
your spouse. If your spouse died during the tax year, you are still
able to file a joint return for that year. You may also choose to
file separately under the status "Married filing separately". |
| Qualified Widow(er) |
Generally, you qualify for this status if your spouse died
during the previous tax year (not the current tax year) and you and
your spouse filed a joint tax return in the year immediately prior
to their death. You are also required to have at least one
dependent child or step child whom which you are the primary
provider. |
| Single |
If you are divorced, legally separated or
unmarried as of the last day of the year you should use this
status. |
| Head of household |
This is the status for unmarried individuals that pay for more
than half of the cost to keep up a home. This home needs to be the
main home for the income tax filer and at least one qualifying
relative. You can also choose this status if you are married, but
didn't live with your spouse at anytime during the last six months
of the year. You also need to provide more than half of the cost to
keep up your home and have at least one dependent child living with
you. |
| Married filing separately |
If you are married, you have the choice to file separate
returns. The filing status for this option is "married filing
separately". |
- Number of qualifying children
- Enter the number of children in your family that qualify for
the Earned Income Credit (EIC). The IRS has a set of three
requirements that must be met to have a child considered qualified.
- Your relationship to the child must be:
- Son, daughter, stepchild, eligible foster child, or a
descendant (for example, your grandchild) of any of them, or
- Brother, sister, half brother, half sister, stepbrother,
stepsister, or a descendant of any of them (for example, your niece
or nephew).
- Age of your child must be:
- Under age 19 at the end of 2007
- A full-time student under age 24 at the end of 2007, or
- Permanently and totally disabled at any time during 2007,
regardless of age.
- Your child must have lived with you in the United States for
more than half of 2007.
- Earned income
- This is any income from wages, salaries, tips or any other
earned income that is taxable. Do not include any non-taxable
benefits in this total. Also include any earnings from farms, farm
partnerships or businesses that did not require payment of
self-employment taxes. Do not include any scholarships, penal
income, annuity or pension income.
- Self-employment income
- Include any self-employment income where you were required to
pay self-employment taxes. The EIC requires you to reduce your
self-employment income by 1/2 of your self-employment tax
bill.
- Investment income
- Investment income includes the total of any of the following:
Taxable Interest, Tax-exempt Interest, Capital Gains (do not
include any capital gain or loss from the sales of business
property), net income from any passive activities (generally, this
would income generated from investments where you do not
participate in the day to day management of the business or
activity).
- Non-taxable combat pay
- If you received any non-taxable combat pay, the IRS allows you
choose whether to figure your EIC with or without this pay
included. This calculator will automatically choose the option that
produces the highest EIC.
- Adjusted gross income
- Your adjusted gross income. This is usually your earned income
entered above, plus any interest, dividends or capital gains. If
your adjusted gross income is greater than your earned income your
Earned Income Credit is calculated with your adjusted gross income
and compared to the amount you would have received with your earned
income. The lower of these two calculated amounts is your Earned
Income Credit.
- Scholarships, penal & retirement income
- If you received income from any of these sources, it does not
qualify for the Earned Income Credit. Your eligible Earned Income
is reduced by this amount.
- Are you (or spouse if married) between the ages of 25 and
65?
- Check this box if you or your spouse will be 25 to 65 years old
at the end of the year. To qualify for the Earned Income Credit,
either you or your spouse (if you are married) must be at least 25
years old and no greater than 65 years old at the end of the year.
This rule only applies to people without any children. Your
response is not used if you have 1 or more qualified children.
- Can you (or your spouse if you are married) be claimed as a
dependent of someone else?
- If you have no qualifying children, you can't be the dependent
of someone else and receive Earned Income Credit. If you are
married, your spouse must also meet this requirement. Generally
speaking, you are considered someone's dependent if they provide
for more than half of your support during the year.
- Can you (or spouse if married) be claimed as a qualifying
child of someone else?
- You cannot be a qualifying child of another person and receive
Earned Income Credit. If you meet the requirements to be a
qualifying child of your parents based on the EIC rules, you are
unable to claim any EIC for yourself. This is the case even if your
parent or parents do not qualify for EIC and whether or not you
have any qualifying children of your own.
- Have you (and spouse if married) lived in the U.S. for at
least six months?
- Check this box if you (and your spouse if married) lived in the
United States for more than six months of the year. You must have
lived in the U.S. for at least six months and one day during the
current year. This only applies if you do not have any qualified
children. For military personnel, you are able to include any time
spent on extended deployment as living in the U.S.
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