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• Advance EITC do I have to file a tax return?
  Yes. If you receive the Advance EITC, you must file a tax return. The Form W-2 provided by your employer will show the amount of the advance EITC you received. This amount must be reported on your tax return. You will also be able to claim any additional credit to which you may be entitled.Report advance payments of EIC received in 2006. If you received advance payments of EIC in 2006, you must file Form 1040 or Form 1040A to report the payments. Your Form W-2, box 9, will show the amount you received. Report the amount on line 61 (Form 1040) or line 36 (Form 1040A).
• Could my advance EITC payments change?
  Yes, if during the year, your income rises above the dollar limit, or you no longer qualify for the EITC, you need to fill out a new Form W-5 and give it to your employer to stop the advance payments.If you no longer qualify for the Advance EITC, you will have to repay all advance EITC money when you file your tax return.
• How do I get Advance EITC payments?
  See if you qualify for Advance EITC payments by completing the five questions on the back of Form W-5, Earned Income Credit Advance Payment Certificate, available here or through your employer.If you qualify, complete the bottom part of the Form W-5 and give it to your employer. Then, based on your income, your employer adds additional money to your take-home pay in each paycheck.If your only income is from self-employment, you cannot qualify for advance EITC payments.
• Interested in the advance EITC
  If you are working and 1.you expect that your 2007 adjusted gross income (AGI) and earned income will each be less than $33,241 ($35,241 if you expect to file a joint return for 2007),2.you expect to have at least one qualifying child, and 3.you expect to qualify for the EITC, you can choose to get part of the credit with your paycheck.The Advance Earned Income Tax Credit (AEITC) for TY 2007 maximum credit the employer is allowed to provide thoughout the year with the employees pay is $1,712.Note: You may be able to claim a larger credit when you file your TY 2006 Form 1040 or Form 1040A because your employer cannot give you more than $1,648 throughout the year with your pay. You may also be able to claim a larger credit if you have more than one qualifying child. But you must file your 2006 tax return to claim any additional credit.
• Student Withholding
  If you are a student, you are not automatically exempt. If you work only part time or only during the summer, you may qualify for exemption from withholding.For help with your withholding, you may use the Withholding Calculator. This easy-to-use calculator can help you figure your federal income tax withholding so your employer can withhold the correct amount from your pay. This is particularly helpful if you have had too much or too little withheld in the past, your situation has changed, or you are starting a new job.
• Repaying Withheld Tax
  If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Your employer cannot repay any of the tax previously withheld.However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Your employer can repay the amount that was incorrectly withheld. If you are not repaid, your Form W-2 will reflect the full amount actually withheld.If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. The exemption applies only to income tax, not to Social Security or Medicare tax.You can claim exemption from withholding for 2007 only if both the following situations apply.-For 2006 you had a right to a refund of all federal income tax withheld because you had no tax liability.-For 2007 you expect a refund of all federal income tax withheld because you expect to have no tax liability.
• Getting the Right Amount of Tax Withheld
  In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. -You accurately complete all the Form W-4 worksheets that apply to you. -You give your employer a new Form W-4 when changes occur.But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. This is most likely to happen in the following situations. -You are married and both you and your spouse work. -You have more than one job at a time. -You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. -You will owe additional amounts with your return, such as self-employment tax. -Your withholding is based on obsolete Form W-4 information for a substantial part of the year.To make sure you are getting the right amount of tax withheld, get Publication 919. It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. It also will help you determine how much additional withholding, if any, is needed each payday to avoid owing tax when you file your return.
• Married individuals
  If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Use only one set of worksheets. You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims.If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions.
• Two jobs
  If you have income from two jobs at the same time, complete only one set of Form W-4 worksheets. Then split your allowances between the Forms W-4 for each job. You cannot claim the same allowances with more than one employer at the same time. You can claim all your allowances with one employer and none with the other, or divide them any other way.
• Changing Your Withholding
  Events during the year may change your marital status or the exemptions, adjustments, deductions, or credits you expect to claim on your return. When this happens, you may need to give your employer a new Form W-4 to change your withholding status or number of allowances.If the event changes your withholding status or the number of allowances you are claiming, you must give your employer a new Form W-4 within 10 days after either of the following. -Your divorce, if you have been claiming married status. -Any event that decreases the number of withholding allowances you can claim.- Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. -Changing your withholding for 2007. If events in 2006 will decrease the number of your withholding allowances for 2007, you must give your employer a new Form W-4 by December 1, 2006. If the event occurs in December 2006, submit a new Form W-4 within 10 days.
• Start New Job
  When you start a new job, you must fill out Form W-4 and give it to your employer. Your employer should have copies of the form. If you need to change the information later, you must fill out a new form.If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. You may be able to avoid over withholding if your employer agrees to use the part-year method. See Part-year method in chapter 1 of Publication 505 for more information.
• Salaries and Wages
  Income tax is withheld from the pay of most employees. Your pay includes your regular pay, bonuses, commissions, and vacat