Earned Income Tax Credit Turns 50: How to Save Big on Your Taxes in 2025
Taxes are the money we pay to the government. This money helps pay for things like schools, roads, and hospitals. Let's look at some recent news about taxes in the United States.
New Tariffs on Imports
Recently, President Donald Trump announced new taxes called tariffs on goods coming into the United States from Canada, Mexico, and China. A tariff is a tax on products from other countries. The tariffs are 25% on items from Canada and Mexico, and 10% on items from China. These tariffs are meant to protect American businesses and workers by making foreign products more expensive, encouraging people to buy American-made goods. However, this might also mean higher prices for things we buy, like cars, electronics, and food. Other countries are not happy about these tariffs and have announced their own tariffs on American goods. This situation is sometimes called a "trade war."
Earned Income Tax Credit Turns 50
The Earned Income Tax Credit (EITC) is a special tax benefit that helps low- to moderate-income workers and families get a tax break. This year, the EITC celebrates its 50th anniversary. The Internal Revenue Service (IRS) and its partners recently launched an awareness campaign to inform people about this credit. If you qualify, the EITC can reduce the amount of tax you owe and might give you a refund. It's important to check if you're eligible so you don't miss out on this benefit.
IRS Offers Tips for Easier Tax Filing
Filing taxes can be confusing, but the IRS has provided some tips to make it easier:
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Gather All Necessary Documents: Make sure you have all your income statements, like W-2s or 1099s, and any other important papers before you start.
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Use Electronic Filing: Filing your taxes online is faster and can help you avoid mistakes.
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Choose Direct Deposit: If you're getting a refund, opting for direct deposit can get your money to you more quickly.
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Check for Tax Credits and Deductions: Look into credits like the Earned Income Tax Credit or deductions for education expenses to see if you qualify.
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Use IRS Online Tools: The IRS offers online resources to help you with filing and answering common questions.
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Be Aware of Scams: Be cautious of suspicious emails or calls pretending to be from the IRS. The IRS will not contact you through these methods to ask for personal information.
Following these tips can help make the tax filing process smoother.
Tax Relief for California Wildfire Victims
People in Southern California who were affected by recent wildfires and strong winds now have extra time to file their taxes. The IRS has extended the deadline to October 15, 2025, for individuals and businesses in the affected areas. This extension gives them more time to gather necessary documents and file their tax returns without worrying about immediate deadlines.
New Rules for Retirement Plans
The Department of the Treasury and the IRS have proposed new rules for certain retirement plans, like 401(k) and 403(b) plans. Starting in 2025, many new retirement plans will be required to automatically enroll eligible employees. This means that if you start a new job, you might be automatically signed up to contribute a part of your paycheck to a retirement savings plan, unless you choose to opt out. This change is designed to help more people save money for their future.