Dr. Friday explains how inflation and income changes can affect tax brackets and credit eligibility. She warns that raises can sometimes push taxpayers out of credits like EITC or the child tax credit without planning.
Transcript
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
Taxpayers should evaluate how inflation changes thresholds, especially for credits like the child tax credit and earned income tax credit. High inflation years can meaningfully increase brackets, and reduce effective tax rates.
What I’m basically saying is everyone’s making more money. But when you’re making more money and they’re not adjusting those thresholds, you could be getting yourself outside of earned income credit because you made too much money. You may not qualify for the child tax credit because you’ve made too much money, even though all those raises help you feed your family and do good things.
It doesn’t always help you when it comes to taxes. You need to plan. If you need help, drfriday.com.
You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.