# I have a tax question regarding Earned Income Credit (Dependents)



## lrod1887 (Aug 16, 2015)

so with my normal income I make around $42, 000.00

i just been doing uber and It will add like $7,000-10,000 , which is over the limit to get an earned income credit for 2015, ($46,000)

does anyone here still get money back from your taxes from your dependents or once you reach a certain amount of income do you no longer get money back.???? does a 1099 count on your income or is it separate?

Thanks. i have 2 dependents under 8 years old and I normally count on that refund. I'm worried to lose that refund due to my newly found income (uber)

thank you

http://www.irs.gov/Credits-&-Deduct...o-I-Qualify-for-Earned-Income-Tax-Credit-EITC


----------



## Casuale Haberdasher (Dec 7, 2014)

lrod1887 said:


> so with my normal income I make around $42, 000.00
> 
> i just been doing uber and It will add like $7,000-10,000 , which is over the limit to get an earned income credit for 2015, ($46,000)
> 
> ...


POST # 1/lrod1887: Contact any one
of the UPNF
Members that do Accountancy Work

Uber taxman ?
UberTaxPro ?
UberHammer could definitely steer
you in the right direction.

Mentoring Bison: Trying to Remember.
You DO know how to use the 
Conversation Function, right ?


----------



## lrod1887 (Aug 16, 2015)

No i dont but i can figure it out  thanks i'll try to mess with it


----------



## Amsoil Uber Connect (Jan 14, 2015)

Uncle Sam is not a Bank and is not your friend.


lrod1887 said:


> does a 1099 count on your income


. Yes, same as a W-2.


----------



## Nuber driver (Oct 7, 2015)

You only need to add in the amount you made after qualifying deductions. At the high end youre about $6,000 over so you need to either find around $6000+ in deductions or hopefully you are still able to make retirement contributions.

If you have an employer based 401k ask if you can increase your contributions before the filing deadline. If you haven't contributed to your IRA yet this year you can reduce AGI by $5500 for that alone (make sure to go with traditional and not ROTH). 

Obviously its better for you to find deductions than have to contribute money that you need now to your retirement, but frankly, its much better to spend some money on your future now and get a tax credit back a few months later than it is to just lose the tax credit and have no retirement savings to show for it.


----------



## UberTaxPro (Oct 3, 2014)

lrod1887 said:


> so with my normal income I make around $42, 000.00
> 
> i just been doing uber and It will add like $7,000-10,000 , which is over the limit to get an earned income credit for 2015, ($46,000)
> 
> ...


What is your filing status? Single, Married filing jointly, married filing separately, head of household or qualifying widower? Is the $7000 - $10000 your gross uber income or have you already deducted normal business expenses like the 57.5 cents per mile deduction?


----------



## lrod1887 (Aug 16, 2015)

Head of household . 

No i havent calculated the deductions. I will look into putting money away to 401k .

Thanks


----------



## UberTaxPro (Oct 3, 2014)

Nuber driver said:


> You only need to add in the amount you made after qualifying deductions. At the high end youre about $6,000 over so you need to either find around $6000+ in deductions or hopefully you are still able to make retirement contributions.
> 
> If you have an employer based 401k ask if you can increase your contributions before the filing deadline. If you haven't contributed to your IRA yet this year you can reduce AGI by $5500 for that alone (make sure to go with traditional and not ROTH).
> 
> Obviously its better for you to find deductions than have to contribute money that you need now to your retirement, but frankly, its much better to spend some money on your future now and get a tax credit back a few months later than it is to just lose the tax credit and have no retirement savings to show for it.


To qualify for the earned income tax credit BOTH earned income and AGI have to be below the IRS limits. Contributing to retirement plans will reduce AGI but not earned income.


----------



## sidewazzz (Jun 30, 2015)

From my understanding the Earned income tax credit is its own deal. If you make too much for that you still can get the get like 1k for each kiddo you claim.


----------



## UberTaxPro (Oct 3, 2014)

lrod1887 said:


> Head of household .
> 
> No i havent calculated the deductions. I will look into putting money away to 401k .
> 
> Thanks


The limit for BOTH earned income and AGI qualification is $44,454 for Head of Household with two qualifying children for 2015. After calculating your deductions your Uber income would have to be about $2453 net in order for you to qualify for the EITC . Adding to retirement plans will reduce your AGI but not your earned income and therefore not help you to qualify for the EITC. 
https://www.irs.gov/Credits-&-Deduc...ncome-Limits-Maximum-Credit-Amounts-Next-Year 
Thanks Casuale Haberdasher


----------



## CowboyMC (Aug 26, 2014)

UberTaxPro said:


> To qualify for the earned income tax credit BOTH earned income and AGI have to be below the IRS limits. Contributing to retirement plans will reduce AGI but not earned income.


Sorry, you are incorrect. Contributing to a 401k WILL reduce your earned income. Check IRS website that defines earned income: https://www.irs.gov/Credits-&-Deductions/Individuals/Earned-Income-Tax-Credit/What-is-Earned-Income?
Earned income is the taxable wages on W-2 along with other stuff (net self-employment income). Since 401k is not taxable, W-2 federal wages would have been reduced by 401K contribution.


----------



## UberTaxPro (Oct 3, 2014)

CowboyMC said:


> Sorry, you are incorrect. Contributing to a 401k WILL reduce your earned income. Check IRS website that defines earned income: https://www.irs.gov/Credits-&-Deductions/Individuals/Earned-Income-Tax-Credit/What-is-Earned-Income?
> Earned income is the taxable wages on W-2 along with other stuff (net self-employment income). Since 401k is not taxable, W-2 federal wages would have been reduced by 401K contribution.


This gets complicated. There are two measurements for eligibility for the EIC. One is adjusted gross income and the other is earned income. If either is over the limit, then you are not eligible for the EIC.
Making a deductible contribution to a Traditional IRA does create an adjustment to your AGI and therefor may put you under the limit for the EIC. However, it does not reduce your Earned Income. So if your earned income is still over the limit, then you are not eligible for the EIC.


----------



## UberTaxPro (Oct 3, 2014)

CowboyMC said:


> Sorry, you are incorrect. Contributing to a 401k WILL reduce your earned income. Check IRS website that defines earned income: https://www.irs.gov/Credits-&-Deductions/Individuals/Earned-Income-Tax-Credit/What-is-Earned-Income?
> Earned income is the taxable wages on W-2 along with other stuff (net self-employment income). Since 401k is not taxable, W-2 federal wages would have been reduced by 401K contribution.


"W-2 federal wages would have been reduced by 401K contribution" AGI is reduced by contributions. You still have to pay soc sec and medicare tax (FICA) on contributions.


----------

