New Tax Laws Easier on Your Wallet - KCBD NewsChannel 11 Lubbock

1/12/03

New Tax Laws Easier on Your Wallet

Tax professional Jack Mayekawa is getting ready. "Our business will probably start picking up next week," he said.

Even though April 15th is three months away, new tax breaks are stirring early interest in potential savings.

"There are two major changes," said Mayekawa. "One is the Earned Income Credit, and the other is what they call Saver's Credit. Under the old Earned Income Credit, many families simply made too much money to qualify for the credit. This year, the IRS has created more ways to take advantage of the savings. I'll give you an example. A married couple with the grandmother living with them and, say, two children. The couples adjusted income is so high that they're not entitled to the Earned Income Credit. The grandmother works part-time earning about $5,000. She can actually claim the Earned Income Credit for the two kids. So that is a tremendous change there."

Also new this year: the Saver's Credit -- rewarding people who've been saving for retirement.

"Let's say you have $2,000 in a retirement account, and your income is on the scale where, let's say you make $29,000. You would be eligible to get 50% of that as credit," said Mayekawa.

That's a tax credit of up to $1,000. "It's an incredible savings," he said.

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