Tag Archives: income

Income Tax Credit for Low-Income Individuals and Families, Office of Child Support Enforcement, ACF, low

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Income Tax Credit for Low-Income Individuals and Families



In partnership with the Temporary Assistance for Needy Families (TANF) and the Internal Revenue Service (IRS), OCSE encourages eligible taxpayers to file for the Earned Income Tax Credit (EITC). Despite the success of the program, research reveals that perhaps 25% of eligible tax filers do not claim it.

  • Nationwide, last year, about 27 million taxpayers received more than $65 billion in EITC.
  • EITC has been instrumental in closing the poverty gap for many of the nation s working families.
  • Children whose families receive refundable tax credits are more likely to attend college and have higher earnings.
  • EITC refunds have been linked to improved infant well-being and health.
  • Children in households that receive the EITC appear healthier, and less likely to develop early disabilities and illnesses linked to child poverty, which may also increase their earning capacity as adults.
  • EITC is a federal tax refund to increase the income of working families by providing tax reductions and cash supplements.
  • As a federally funded anti-poverty initiative, the primary purpose of EITC is to help people employed at low-wages achieve greater financial stability by offsetting taxes, supplementing wages, and making work more more gainful.
  • Refunds received from EITC are not considered income for any federal or federally funded public benefit program, such as:
    • Medicaid
    • Supplemental Security Income
    • Supplemental Nutrition Assistance Program (food stamps)
    • Low-income housing
    • Most cash assistance payments received through state TANF programs
  • Tax filers can file and claim the EITC for free:
    • The Volunteer Income Tax Assistance program offers free tax return preparation service through more than 13,000 community sites for people earning $54,000 a year or less.
    • The IRS offers brand name software products through the Free File website. The IRS works with national partners, community-based coalitions and thousands of local partners and governments. These partnerships provide free EITC tax return preparation, tax help, and tax education.
  • Individuals can check their tax year eligibility by answering questions and providing basic income information using the IRS EITC Assistant that is available in English and en Espa ol. The tools determine filing status, the number of qualifying children a parent may have, and then estimate the amount of EITC filers could expect. They can also print out a summary of their results.
  • Earned Income and adjusted gross income must each be less than:
    • $47,955 ($53,505 married filing jointly) with three or more qualifying children
    • $44,648 ($50,198 married filing jointly) with two qualifying children
    • $39,296 ($44,846 married filing jointly) with one qualifying child
    • $14,880 ($20,430 married filing jointly) with no qualifying children

  • Tax Year 2016 maximum credit:
    • $6,269 with three or more qualifying children
    • $5,572 with two qualifying children
    • $3,373 with one qualifying child
    • $506 with no qualifying children
    • EITC Homepage
    • Federal, state and local tax credit information
    • IRS Publication 3211: EITC Q A brochure in English and Spanish providing quick facts (publication is based on 2015 income and credit levels; nonetheless, provides relevant information)

    OECD Better Life Index, average family income.#Average #family #income

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    While money may not buy happiness, it is an important means to achieving higher living standards and thus greater well-being. Higher economic wealth may also improve access to quality education, health care and housing.

    Household net adjusted disposable income

    Household net adjusted disposable income is the amount of money that a household earns, or gains, each year after taxes and transfers. It represents the money available to a household for spending on goods or services.

    Household adjusted disposable income includes income from economic activity (wages and salaries; profits of self-employed business owners), property income (dividends, interests and rents), social benefits in cash (retirement pensions, unemployment benefits, family allowances, basic income support, etc.), and social transfers in kind (goods and services such as health care, education and housing, received either free of charge or at reduced prices). Across the OECD, the average household net adjusted disposable income per capita is USD 30 563 a year.

    Household net financial wealth

    Household net financial wealth is the total value of a household’s financial worth, or the sum of their overall financial assets minus liabilities. Financial wealth takes into account: savings, monetary gold, currency and deposits, stocks, securities and loans. These financial assets can provide an important source of revenue on their own; either through their sale or refinancing, via pensions, via interest and dividend payments, or other property income. Ideally, measures of household wealth should also include non-financial assets (e.g. land and dwellings), but such information is currently available for only a small number of OECD countries, and is not included here.

    Financial wealth makes up an important part of a household s economic resources, and can protect from economic hardship and vulnerability. For example, a low-income household having above-average wealth will be better off than a low-income household with no wealth at all. Across the OECD, the average household net financial wealth per capita is estimated at USD 90 570.

    The cost of living is taken into account in income and wealth figures as the reported values are adjusted by Purchasing Power Parities (PPPs). PPPs reflect the differences in cost of living for a comparable amount of goods and services consumed by households.

    Over the most recent years, households have enjoyed higher income on average and financial wealth has increased in many OECD countries. Despite the general increase in living standards, some groups have been left behind and inequality has also increased over the same period. On average in OECD countries, the average net-adjusted disposable income of the top 20% of the population is an estimated USD 64 103 a year, whereas the bottom 20% live on an estimated USD 10 045 a year. Some OECD countries such as Australia, Luxembourg and the United States, have a much more unequal income distribution than others.

    Disability and Earned Income Tax Credit, Internal Revenue Service, disability income.#Disability #income

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    Disability and Earned Income Tax Credit

    Some disability retirement benefits qualify as earned income to claim the Earned Income Tax Credit or EITC. Also, you may claim a relative of any age as a qualifying child if the relative is totally and permanently disabled and fits all other EITC requirements.

    IRS considers disability retirement benefits as earned income until you reach minimum retirement age. Minimum retirement age is the earliest age you could have received a pension or annuity if you did not have the disability.

    To be your qualifying child for EITC, a child must have a Social Security Number that is valid for employment and is issued before the due date of the return. The child must also pass the age, relationship, residency, and joint return tests. Your child must be your son, daughter, adopted child, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister or a descendent of any of them.

    Age Test for Qualifying Child with a Disability. There is no age limit and the child does not have to be younger than you if the qualifying child is permanently and totally disabled. Your qualifying child is permanently and totally disabled if both of the following apply:

    1. He or she cannot engage in any substantial gainful activity because of a physical or mental condition and
    2. A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death.

    If the qualifying child receives disability benefits, you can still use the child for EITC purposes. Read more about the additional tests for a qualifying child here.

    Proof of Permanently and Totally Disabled. To prove your claim of EITC for a child who is permanently and totally disabled, you need a letter from the child’s doctor, other healthcare provider or any social service program or agency verifying the child is permanently and totally disabled.

    Sheltered Employment. A child working for minimal pay under a special program for people with disabilities is not engaged in a “substantial gainful activity” under the definition of permanently and totally disabled. Work for minimal pay offered to people with physical or mental disabilities or sheltered employment must be offered by qualified locations. Qualified locations are:

    • Sheltered workshops,
    • Hospitals and similar institutions,
    • Homebound programs, and
    • Department of Veterans Affairs (VA) sponsored homes.

    What do I have to do to get EITC?

    You must file a tax return to determine your eligibility to claim the EITC. Many miss out because they owe no tax so do not file a tax return.

    Free File Your Return. Free File is the fast, easy and free way to prepare and e-file your federal taxes online. The Free File program provides free federal income tax preparation and electronic filing for eligible taxpayers through a partnership between the Internal Revenue Service and the Free File Alliance LLC, a group of private sector tax software companies. Or you can use the free fillable tax forms feature. Find out more about Free File here.

    EITC Impact on Other Government Benefits

    Refunds received from the Earned Income Tax Credit (EITC or EIC), the Child Tax Credit (CTC) or other refundable credits are not considered income and is not counted as a resource for at least 12 months from when your receive it for benefits or assistance under any Federal program or under any State or local program financed in whole or in part with Federal funds.

    But, it is always best to check with your local benefit coordinator to find out if your benefits fall under this provision.

    Additional Resources

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    Multiple Streams of Income, A GOOD MAN, multiple streams of income.#Multiple #streams #of #income

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    Multiple Streams of Income

    Multiple streams of income

    In one of my private study sessions recently, I was listening to a set of tapes by Bishop T. D. Jakes titled “10 commandments of working in a hostile environment.” The Bishop briefly took a digression in theme of the series to share a thought about “new streams” from the book of Genesis.

    8 The Lord God planted a garden eastward in Eden, and there He put the man whom He had formed. 9 And out of the ground the Lord God made every tree grow that is pleasant to the sight and good for food. The tree of life was also in the midst of the garden, and the tree of the knowledge of good and evil. 10 Now a river went out of Eden to water the garden, and from there it parted and became four riverheads. 11 The name of the first is Pishon; it is the one which skirts the whole land of Havilah, where there is gold. 12 And the gold of that land is good. Bdellium and the onyx stone are there. 13 The name of the second river is Gihon; it is the one which goes around the whole land of Cush. 14 The name of the third river is Hiddekel; it is the one which goes toward the east of Assyria. The fourth river is the Euphrates. 15 Then the Lord God took the man and put him in the garden of Eden to tend and keep it.

    He said there were four rivers or streams flowing into the paradise called the Garden of Eden and then went on to make the statement that for our lives to become the paradise God wants it to be we must have at least 4 streams or sources flowing into our lives particularly in the area of finances where our income from a job would be one stream or river!

    This struck a home run with me since at that, time I had begun to believe we were entering into a season of harvest with breakthrough opportunities and prosperity like we had not seen or experienced as God s people. Unusual opportunities and situations would be available to us in this season to prosper and establish our lives, families, ministries and churches.

    We needed to first of all, put ourselves in a position to plan, prepare and recognize these opportunities in order to take full advantage of them because after this season would come another season without these opportunities and those who were wise in this season would rest and even prosper more in the coming season regardless of the conditions.

    These new streams in our lives, finances, and ministry would include not only the development of new ways and methods but also the discovery of new ways of doing old things and new ways of solving problems and overcoming challenges. It would also include investment opportunities and avenues to own and earn “portions” in businesses plus multi-dimensional approaches to ministry and divinely ordained relationships to fulfill God s desire for us.

    A friend* Pastor Matel Okoh of RCCG, Jesus House, New Jersey, in America once gave an analysis of what these four streams of income could be in our lives today. It makes for interesting reading and application. It is time we broke the bible down into practical steps we can apply in our lives on a daily basis.

    For you to have wealth in this world there are 4 rivers that must be the source of your income. For you to have abundant life, these four rivers must always flow into your life .

    The first river is called Pison.

    It is the river that flows round the land. The land of Havaliah has gold. Gold signifies wealth. For you to enjoy wealth in life there must be something that brings in a lot of money into your life. That is where witty inventions come in. here and now God can give you an idea. Christians are generally lazy people, even as human beings.

    We don t want to think, nobody wants to think, but when you find out that something makes you to think, it is expanding your capacity to think. If you want to develop muscles, you go to the gym to carry weights. As you work out, it gives you pain and stress. But its the pains it gives you that is developing you.

    When you are thinking, it uses your brain and intellect, it expands your capacity to think well, that is what we call” a weighty idea,” that is the Pison River, that will lead you to the place you have gold.

    The second river is called the Gihon:

    The Gihon River spreads through the land. It talks about investment. And you should start investing now. Don t just sit down and say your salary is okay. Let me tell you about the principle of investments. During the time of abundance in Egypt, the bible says that Joseph spoke to Pharaoh and said save 20%. As you are today, out of your salary make sure you can save 20% every month. Invest it into shares. There are a lot of shares that are good in this country. Buy shares. Deny yourself. Put yourself under a condition where you are buying the future in your present circumstance. Don t sell your future.

    The third river is called Hiddekel:

    Hiddekel is a river that represents where your job comes in. you have a job, that s your salary. An income stream

    The fourth one is river Euphrates:

    The river Euphrates represents the favour that God will use people to bless you. Has anybody ever thought about this, that you will stand up and say, God moved somebody to be a blessing today.

    Think about that and expand your horizon. So that you have four rivers, and that is what scripture speaks about in the Psalms.

    1 Blessed is the man Who walks not in the counsel of the ungodly, Nor stands in the path of sinners, Nor sits in the seat of the scornful; 2 But his delight is in the law of the LORD, And in His law he meditates day and night. 3 He shall be like a tree Planted by the rivers of water, That brings forth its fruit in its season, Whose leaf also shall not wither; And whatever he does shall prosper.

    This is an extract from Rich Pastor, Poor Pastor available on this blog for free download

    Best income investments of 2015, best income bonds.#Best #income #bonds

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    Best income investments of 2015

    Income investors have enjoyed a nice run. In six of the last eight years, yields have fallen and the 10-year Treasury bond returned more than the interest it paid. Other investments with a yield have done well too. But this year shapes up as a challenge.

    For one thing, yields have again fallen to near historic lows, and most experts believe a reversal is inevitable. “Long term, there is only one direction rates can go from here,” said Lane Jones, chief investment officer at Evensky and Katz/Foldes Financial Wealth Management in Coral Gables, Florida. “Our approach is to remain defensive and not reach for yield.”

    Best income bonds

    The U.S. economy shows signs of gaining momentum, and the Fed has signaled it will boost short-term rates later this year. That would provide further upward pressure on bond yields, leaving fixed-income investors vulnerable to loss of principal.

    Yet a reversal is by no means certain. The T-bond’s stingy 1.8 percent yield looks juicy next to government bonds yielding half as much in Europe and Japan. Foreign buying could push bond prices up and yields even lower for a while, especially if the dollar remains strong. Depressed oil prices also tend to work against the case for higher bond yields by tamping down inflation worries.

    Still, the prevailing view is for modestly rising yields this year, which means income investors already earning little return need to be more careful about where they put their money. Here’s a look at some of the most popular income options:


    Any income portfolio should have bonds for stability and diversification, and also because no one really knows where interest rates are going. Wall Street is littered with experts who mistakenly forecast higher rates last year. Making a big bet on direction is often a mistake. But not all bonds are created equal—even though they all seem overvalued early in 2015.

    Corporate junk bonds have the highest yields and may appear most tempting. Top-performing junk bond funds, like Vanguard High-Yield Corporate and Federated High Yield, sport yields above 5 percent. This group has gotten more attractive after slumping in recent months. But the yield premium over Treasuries and investment-grade corporate bonds remains historically slim. “You’re not getting paid much for the extra risk,” said Jacob Wolkowitz, investment manager at Accredited Investors in Edina, Minnesota.

    The problem is that other options don’t look great, either. The paltry 10-year Treasury bond yield doesn’t offer much cushion against loss of principal if yields rise. Investment-grade muni bond funds look attractive—but only for investors in the highest tax bracket, where the effective yield is around 3 percent. Your best bet in the bond world might be investment-grade corporates, which offer relative safety and a yield near 3 percent. The Vanguard Total Bond Market fund yields 2.5 percent, sticks with high quality and has an average maturity of 5.6 years—which most bond pros say is in the sweet spot on the yield curve.

    Dividend stocks

    Best income bonds

    The stock market has a lot to offer yield investors in an environment where the economy is expected to grow at about 3 percent, which should underpin share prices while allowing companies to keep raising their dividend. But as with bonds, advisors say not to stretch for the highest payouts.

    “Shy away from those with the highest dividend yields,” said Tom Fredrickson, a fee-only financial planner in Brooklyn, New York. Unusually high yields suggest a company is struggling and may cut its dividend. Meanwhile, he added, “if interest rates rise, bonds will become more attractive,” and investors will sell these stocks to get the income they want with less risk. He would avoid, for example, AT T now yielding about 5.5 percent. He is also looking beyond utilities, which are traditional yield stocks but posted big returns last year and seem vulnerable.

    Individual stocks with a history of raising their dividend include Johnson Johnson, Emerson Electric and Coca-Cola, all with dividends around 3 percent. Other choices to consider: Vanguard High Dividend Yield or iShares Select Dividend, both ETFs yielding around 3 percent and holding stocks that should keep raising their payouts.


    The rest of the income world offers a mixed bag that may be best held as part of a diverse income portfolio. Real Estate Investment Trusts had a great 2014 and appear expensive. Like junk bonds, they offer a slim yield premium over Treasuries for the risk. For exposure, consider iShares Dow Jones U.S. Real Estate, an ETF.

    Master limited partnerships (MLPs) are mostly tied to the oil and gas industry, which is in a funk, with oil near $45 a barrel. Avoid those with yields above 10 percent, a signal they may cut their payout. Consider capturing this group’s attractive income through Alerian MLP, an ETF with a 6.5 percent yield. Warning: MLPs come with complicated tax rules and may be best held in an IRA.

    Preferred stocks offer yields in the 5 percent to 6 percent range but give you little of the upside of common stocks. They also come in many flavors that may be difficult for individuals to vet. Here again, an ETF like PowerShares Preferred Portfolio, recently yielding 5.9 percent, might be the best choice.

    “I like all these strategies, and they work best when combined,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. In this low-yield environment, income investors have to look beyond traditional vehicles, which do little more than keep up with inflation. Holding a range of income investments, he said, “can give you a higher yield than traditional bonds with similar risk and which will adjust as rates rise.”

    Expense Budget Spreadsheet Template for Business, income and expenditure template.#Income #and #expenditure #template

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    Expense Budget Spreadsheet Template for Business

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    A budget helps an individual to reach both the spending and saving goals as it tracks the spending rate, income and expenses. The challenge always is developing a budget spreadsheet, whereby you might omit or forget to list all items. Therefore, it is easy and cheaper to do it through the help of a template. The expense budget spreadsheet template is part of a financial planning series referred to as the process of making a budget using a template.

    Expense budget spreadsheet template gives the individual a chance to predict the amount of cash flow the individual has. The expense budget spreadsheet template has various uses, which include, easy budgeting by feeling in the details on the monthly budget template in accordance to your financial income and expenditure desires. Apart from that, it allows the individual to put each item he or she purchases in the item category and after adding up. It is then compared to the total amount spent with the amount budgeted. This helps the individual to add up income and expenses and find the difference between the two. Some like the wedding budget template help are used to show how much you should spend on each item in the wedding. They also help you think of expenses you might not have thought of.

    In addition to this, the expense budget spreadsheet template can be used to create a yearly budget and track the expenses one’s expenses from month to month thus useful for planning large purchases or making major life changes such as kids, school, changing jobs and marriage. The expense budget spreadsheet template provides for different budgets so that the individual has freedom to choose the one that he prefers. They include budget by month, which lists the monthly expenses, tracks the income and tally the monthly averages, yearly budget, and personal budget, household budget mainly for families where mostly the income of the parents is tallied and budget worksheet. The expense budget spreadsheet template should be updated periodically as an income or expense item changes in amount or at the end of every month as you receive the statements. The ultimate benefit is this template is that you do not have to prepare any other spreadsheet but rather use the expense budget spreadsheet template provide online for all you are budgeting.

    Preview of Expense Budget Spreadsheet Template for Business :

    Income and expenditure template

    EVC – INSTEAD OF ITR-V Income tax Return E-Filing & do not need to send

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    (EVC) INSTEAD OF ITR-V Income tax Return E-Filing do not need to send the ITR-V by Post

    Filing of income tax return meaning

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    Government is trying hard to go green but the necessity of sending signed ITR-V form to Bangalore was becoming an obstacle to make e-filing process completely paperless. Digital Signature has already been mandated for the companies to file and verify their returns but individuals were given an option to sign the physical copy of ITR-V and send it to CPC, Bangalore.

    Government has come out with the Electronic Verification Code for verifying the income tax return to get rid of this last piece of paper and make the e-filing process completely paperless. Now, you just have to put an EVC after filing your return and you are done with e-filing, no need to send signed ITR-V to CPC, Bangalore within 120 days’ time frame.

    What is Electronic Verification Code (EVC)?

    Electronic Verification Code (EVC) is a 10 digits alpha numeric code to verify your income tax return and can be generated via various methods. Let’s see the features and usage of Electronic Verification code to e-verify your income tax return.

    • EVC is a 10 digit alpha numeric code which would verify the identity of the person filing the income tax return.
    • The EVC could be used to verify ITR 1 (Sahaj) / ITR 2 / ITR 2A / ITR 3 / ITR 4 /ITR 4S (Sugam).
    • EVC would be unique and can be used only with the PAN of the person furnishing the income tax return. This means one EVC for one PAN.
    • One EVC can be used to validate only one ITR whether it is original or revised return.
    • The EVC remains valid for 72 hours but can be generated various times through various modes.
    • In case the tax returns are already filed or uploaded, the verification needs to be done within 120 days of filing of return.

    How to Generate Electronic Verification Code (EVC)?

    CBDT has notified four methods to generate Electronic Verification Code (EVC). Before proceeding to generate EVC please ensure that the mobile number and email address registered with the CBDT is accessible by you.

    1. Generate EVC through e-filing website

    I consider this as the simplest method because you just need to click few buttons and you will get EVC on your mobile and registered email.

    But this method is only available if your salary income is up to Rs.5 lacs and you are not claiming any tax refunds.

    • Simply login to your account with PAN number as user id and your password.
    • Click on the e-file tab and select Generate EVC as shown in the image below:
    • You would then receive EVC on your registered mobile number as well on your registered email address.Put the code in the box on the screen and the process of e-filing gets completed.

      2. Generate EVC through Linking Aadhaar Card with PAN

      Before generating EVC through Aadhaar Card, make sure that your mobile number should be registered with your aadhaar. (I faced this problem generating EVC).

      How to link your aadhaar with PAN?

      After login, you would see “Profile Settings” Tab besides downloads. Click on it and a drop-down menu would appear, select Link Aadhaar with PAN.

      Fill in the required details and click on Link Now to complete the process.

      Next Step would be to generate EVC and for that you have to select “I would like to generate Aadhaar OTP to e-Verify my return” at the time of e-verifying your tax return.

      3. Generate EVC through Bank ATM (Automatic Teller Machine)

      For this option you have to use the ATM card of the bank which is registered with the IT department. You can generate EVC by selecting “generate EVC for ITR filing” appears on the ATM Screen. The EVC would be sent to your registered mobile number with Bank.

      4. Generate EVC through Net Banking Facility

      Generating EVC using Net Banking requires you to route your process of e-filing through the bank which is registered with IT Department. You would have to login into your net banking account and seek the redirection to income tax e-filing website where you can generate EVC. The EVC would be sent to your registered mobile number with Bank.

      This option requires a valid PAN to be linked with your Bank account as per KYC norms and ITR should be for same PAN number.

      How to use Electronic Verification Code (EVC) to verify Income Tax Return?

      Electronic Verification Code (EVC) for e-verification process of Income Tax Return can be used while:

      1. Uploading of Return using Net Banking
      2. Uploading of Return without using Net Banking
      3. For already Uploaded Return

      1. In case you are Uploading Tax Return without using Net Banking than as soon as you are finished with uploading of return, a screen having following options would popup:

      • Option-1 – “I already have an EVC and I would like to Submit EVC”
      • Option-2 – “I do not have an EVC and I would like to generate an EVC”
      • Option-3 – “I would like to generate Aadhaar OTP to e-Verify my return”
      • Option-4 – “I would like to e-Verify later! I would like to send ITR-V”

      You can use any one of the above options (1 to 3) to e-verify your Income Tax Return and download the Acknowledgement (No Further action required).

      Option 1 requires you to put the EVC you have already generated and then download the Acknowledgement (No Further action required).

      Option 2 requires you to generate EVC either through AMT or E-filing website.

      Option 3 would use generating EVC through Aadhaar Card (As described above).

      Option 4 would means you don’t want to use the new method of EVC and would like to go with the old method of ITR-V signing and sending it to CPC Bangalore.

      2. In case you have routed to e-filing website through net banking account then after you finish uploading tax return three options would be shown on your screen:

      • Option-1 – “I would like to e-Verify my return now”
      • Option-2 – “I would like to generate Aadhaar OTP to e-Verify my return”
      • Option-3 – “I would like to e-Verify later! I would like to send ITR-V”

      You can use any one of the above options (1 and 2) to e-verify your Income Tax Return and download the Acknowledgement (No Further action required).

      Option 1 would simply need you to confirm the verification of ITR by clicking on “Continue” button. Download the Acknowledgement (No further action is required).

      Option 2 remains same as in above case and ECV would be sent to your registered mobile number.

      Option 3 would be old method of ITR-V signing.

      3. Verification of Already Uploaded Returns requires you to verify them within 120 days of submission or uploading by following below mentioned steps:

      • Login to your income tax e-filing website.
      • Click on e-file button and select e-verify in the drop-down menu.
      • Remember: E-Verification of Income Tax Return through Electronic Verification Code (EVC) is available from the current assessment year i.e. 2015-16 (F.Y. 2014-15). If you are filing belated return of the last previous year u/s 139(4) or filing revised returns for past years u/s 139(5) than you would have to follow the old method of ITR-V signing and sending it to CPC, Bangalore within 120 days of filing of return.

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    Sample Business Budget Template for Income and Expenses, income and expenditure template.#Income #and #expenditure #template

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    Sample Business Budget Template to Estimate Income and Expenses

    Income and expenditure template

    Here is a worksheet you can use to set up a basic business budget. Depending on your particular type of business, you may have to include different types of income or expenses, but this worksheet should give you the general idea of the types of items you should include in your business budget.

    Basic Business Budget Worksheet

    How to Use Your Business Budget

    Ideally, you should update your budget monthly, using your expenses and income for the prior month as your guide, and working with your senior staff. That way, you can tweak your budget as you go.

    This monthly business budget review may indicate where efforts have been successful. For example, if you switch health insurance carriers to obtain lower-cost coverage, you can see how that change affects your bottom line month over month (and year over year, as well).

    A monthly business budget review can help you spot potential problems, as well. For example, if you re a retail business, you may realize you need to ramp up your advertising spending more in the fall in order to take advantage of the holiday shopping season. Or if you ve made changes that could have tax implications, you may need to bump your accounting spending.

    Why Write a Business Budget at All?

    If your business is small, you may wonder why you need a budget — after all, you most likely have a pretty good idea of your monthly cash flow and expenses.

    This may be even more true if your business is well-established, with a cash flow pattern that s quite similar year over year.

    However, even if this is the case for your business, you still should consider at least drafting a basic budget, like the one on this worksheet. Even the best-established business can run into problems with supply chain, or face a sudden, unexpected expense like a substantial rent increase.

    Having a budget in place — even if it s a rudimentary one that you update only once per year — can help you plan for those eventualities and ride them out when they happen. It also might help you see where you could shave costs to increase your profits.

    Income tax, taxation, individual income tax.#Individual #income #tax

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    Income tax

    income tax , levy imposed on individuals (or family units) and corporations. Individual income tax is computed on the basis of income received. It is usually classified as a direct tax because the burden is presumably on the individuals who pay it. Corporate income tax is imposed on net profits, computed as the excess of receipts over allowable costs.

    As an instrument of national policy, the individual income tax has played different roles in different countries at different times, beginning in Great Britain at the close of the 18th century. By 1914 the “personal” income tax had come to be regarded in a number of countries not only as an important revenue instrument but also as an instrument for achieving social reform through income redistribution. Finally, in most countries it has been used to redirect economic decisions through preferential treatment of various activities. It can also act as a stabilizer against economic fluctuations because its effect on purchasing power varies inversely with changes in income and employment. For example, a person who experiences a reduction of income due to a job loss will typically owe less in taxes; the employed person will pay more in taxes but will have more income available for purchases. More recently, however, opinion has shifted away from the view that the income tax should be used for these purposes because of the costs involved, in terms of disincentives and other distortions of economic behaviour.

    Regarding income taxes on corporations, nearly all countries assess them, but the provisions and rates differ widely. Since industrialized countries generally have larger corporate sectors than less-developed countries, corporation income taxes in developed countries tend to be greater in relation to national income and total government revenue—except in major mineral-producing areas of less-developed countries.

    The United Kingdom for a long time applied the income tax on corporations (companies) purely as a supplement to the taxation of individuals. Shareholders had to pay tax on dividend income only to the extent that the rate of individual tax applicable to such income exceeded the corporate rate; they received refunds if that rate was less than the corporate rate. This system was modified in 1937 and replaced in 1965 by a separate corporation tax.

    Income Tax efiling Online in 6 Simple Steps for Free, efiling income tax.#Efiling #income #tax

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    Income Tax efiling Online in 6 Simple Steps for Free

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    Efiling income tax

    Income Tax efiling can be done online through the Income Tax Website without any cost in 2 different ways:-

    1. Income Tax efiling by downloading the ITR Java utility or the ITR Excel Utility and furnishing details in the excel utility offline and then uploading it on Income Tax Website
    2. Income Tax efiling without downloading the Java Utility and furnishing all details online itself.

    Procedure for Income Tax efiling using ITR Java Utility/ ITR Excel Utility

    The Income Tax Department releases an updated income tax software for free every year for income tax efiling online. The Income Tax Software is released both in the form of Excel as well as Java Utility.

    The Java Utility is a new type of utility and is much easier to file than the Excel Utility. Earlier, only the tax utility was released but now the Govt also releases a Java Utility which is much easier to file than the Excel Utility as it fetches a lot of details automatically and uploading the returns through the Java Utility is also much easier.

    The following Article are the steps involved for Income Tax efiling by downloading the Java/ Excel Utility:-

    1. Logon to https://www.incometaxindiaefiling.gov.in and select the Income Tax Return Form for your type of Income. There are various different Income Tax Return forms for different class of assessees. Recommended Read: Which Income Tax Form should you use?
    2. Download the ITR Java/ Excel Utility which pertains to your Income Tax Form and furnish all details in the ITR Java Utility and also cross check the same with the figures as mentioned in your Form 16/ Form 16A/ Form 16B and Form 26AS.
    3. After furnishing all details in the ITR Utility and validating the same, you can directly upload your Income Tax Return through the Java utility by logging in your account on the income tax website through the Java Utility itself. Alternatively, you may create a xml file of the Income Tax Return and then upload this file on the income tax website. (If you ve forgotten your income tax efiling password, refer this article on How to recover income tax efiling password).
    4. On successful upload of your income tax return, an Acknowledgement Details would be displayed. An ITR-V would also be automatically generated and sent to your registered email id.
    5. In case while efiling income tax return you used your Digitally Signatures to digitally sign the Income Tax Return Form, the whole process gets completed on generation of Acknowledgement .
    6. However, in case while efiling income tax return , you didnt use Digital Signatures , on successful uploading of e-Return, the ITR-V Form would be generated and sent to your registered email id. This ITR-V Acknowledgement form should be signed by the Tax Payer and sent to the Income Tax Office.
    7. From the Financial Year 2014-15 onwards, the govt has also extended the option of linking the Aadhar Card with the ITR Form. Once the Aadhar Card and the ITR Form have been linked, the taxpayer wont be required to physically send the ITR Form to the Income Tax Office even if he didn t use the Digital Signature to sign the form.

    Procedure for Income Tax efiling without downloading the Excel Utility

    Income Tax efiling can also be done without downloading the Income Tax Software and simply by furnishing all the details online. For efiling Income Tax Return without downloading the Java Utility, a person would be required to login to his account on https://www.incometaxindiaefiling.gov.in and then go to e-File Income Tax Return Prepare and Submit Online

    If the Income Tax Returns have not been Digitally Signed, the taxpayer would be required to take a print out of the ITR-V Acknowledgement Form, sign it and send it to the Income Tax Department

    The Address for sending duly signed ITR-V form is “ Income Tax Department – CPC, Post Bag No 1, Electronic City Post Office, Bengaluru 560100, Karnataka ,” by ordinary post or speed post only, within 120 days of transmitting the data electronically. In case, Form ITR-V, is furnished after the end of 120 days from the date of filing of Income Tax Return , it will be deemed that the return in respect of which the Form ITR-V has been filed was never furnished and it shall be incumbent on the Tax Payer to electronically re-transmit the data and follow it up by submitting the new Form ITR-V within 120 days. This completes the income tax efiling process for non-digitally signed Returns.

    Efiling income tax

    Other Relevant points regarding Income Tax efiling

    1. The Self Assessment Tax computed as per the Income Tax Slabs (after deducting the TDS and Advance Tax paid) is required to be fully paid before filing the Income Tax Return. (Recommended Read: Income Tax Slab Rates).
    2. In case excess tax is paid by the taxpayers, he can claim a refund of income tax by disclosing all facts in the income tax return. (Procedure for claiming Income Tax Refund)
    3. The due date for Income Tax efiling is 31st July of the Assessment Year for taxpayers not required to get their Tax Audit done. For all taxpayers who are required to get their Tax Audit done, the Due Date is 30th September . (Category of Taxpayers who are required to get Tax Audit done by a Chartered Accountant)
    4. If a taxpayer is unable to file the income tax return before the income tax filing due date, he may file a Belated Income Tax Return along with Interest and/or Penalty.
    5. In case any error is recognised in the income tax return by the taxpayer himself, he may file a Revised Return of Income u/s 139(5) before the expiry of 1 year from the end of the relevant assessment year or before the completion of assessment (whichever is earlier).
    6. There are several other softwares of private vendors which are authorised by the Income Tax Deptt for Income Tax efiling online.

    In case of any query with respect to income tax efiling, please post them on Chartered Club Q A Portal and we would be happy to answer.

    Karan is CA by Qualification with the rare distinction of being awarded All India Rank 22. He is also the founder of this website and loves to help people with their Tax Queries.

    Efiling income tax