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I. Pre Start-up/Assessing Your Business Idea II. Starting Your Business/Keeping Records III. Guidance for Special Types of Businesses IV. Hiring Employees V. Preparing Your Tax Return(s) and Information Returns VI.  Filing Your Returns and Paying Taxes - Including Electronic Options VII.  Post-Filing Issues VIII. Other Tax Issues of Interest IX. Index of Business Forms and Publications Including: Highlights of the New Tax Law Changes X. Changing Your Business or Getting Out of Business XI. Alerts and Tutorials XII. Directory of Internet and Other Resources
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Rule 14 - Your Total Earned Income Must Be Less Than:

  • $30,580 if you have more than one qualifyingchild,
  • $26,928 if you have one qualifying child, or
  • $10,200 if you do not have a qualifying child.

Earned income isexplained in Rule 6 in chapter 1and some examples areshown in Table 3. You figure your total earned income byadding your nontaxable earned income and your taxable earned income.You can use Worksheet 2.

Table 3.alberghi a Atene Examples of Taxable and Nontaxable EarnedIncome

Taxable Earned IncomeNontaxable Earned Income
Wages, salaries, and tips.Salary deferrals and reductions.
Union strike benefits.Meals and lodging provided for the convenience of youremployer.
hotel room in BorgarnesLong-term disability benefits received before minimumretirement age.Excludable dependent care benefits.
Net earnings from self-employment. Excludable adoption benefits.
Gross income received as a statutory
employee.
Excludable educational assistancebenefits.

Worksheet 2: Earned Income


Note. Do not include onthis worksheet any net earnings from self-employment or any income youreceived as a statutory employee. Instead, enter those amounts onEIC Worksheet B (page 30).
Taxable EarnedIncome
 1.Warsaw hotel roomsEnter the amount from line 7 (Form 1040 or Form1040A) or line 1 (Form 1040EZ). 1.        
 2.Enter the amount of any taxable scholarship orfellowship grant not reported on a Form W-2. 2.        
 3.Inmates. If you received any amountfor work done while an inmate in a penal institution and that amountis included in the total on line 7 (Form 1040 or Form 1040A) or line 1(Form 1040EZ), enter that amount. 3.+        
 4.Clergy. If you are a member of theclergy who files Schedule SE and the amount on line 2 of that scheduleincludes an amount that was also reported on line 7 (Form 1040), enterthat amount. 4.+        
 5.Add the amounts on lines 2, 3, and 4 of thisworksheet. 5.-        
 6.Subtract line 5 of this worksheet from line 1.This is your taxable earned income. 6.=        
Nontaxable EarnedIncome
 7.Enter the amount of any salary deferrals andreductions. 7.        
 8.Clergy. Enter the amount of anyhousing allowance or the rental value of a parsonage if you werenot required to include that amount on line 2 of ScheduleSE. 8.+        
 9.Enter the value of any meals and lodging thatwere nontaxable because they were provided for the convenience of youremployer. (Do not include any amount included on line 8 of thisworksheet or line 2 of Schedule SE.) 9.+        
10.Enter the total of any other nontaxable amountsyou received for work you performed.10.+        
11.Add the amounts on lines 7, 8, 9, and 10 ofthis worksheet. This is your nontaxable earned income.11.+        
Total EarnedIncome
12.Add the amounts on lines 6 and 11of this worksheet. This is your total earned income. (Ifyou fill out EIC Worksheet A, enter this amount on line 1of that worksheet.)12.=        

  
Your total earned income must be less than:

  • $30,580 if you have more than one qualifying child,
  • $26,928 if you have one qualifying child, or
  • $10,200 if you do not have a qualifying child.

If your total earned income is too great, you cannot claim the EIC.Put "No" directly to the right of line 59a (Form 1040), line 37a(Form 1040A), or to the right of the word "below" on line 8b(Form 1040EZ). You do not need to read the rest of this publication.You can go back and finish the rest of your tax return.

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