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Question
If your net earned income is 20,000, what tax will I have to pay AND how much EITC if there are no children?
AI accountant’s answer:
Assuming you are filing as single and have no children for the tax year 2022, the tax calculation and Earned Income Tax Credit (EITC) are as follows:
1. To determine your federal income tax, first, you need to subtract the standard deduction from your net earned income. The standard deduction for single taxpayers in 2022 is $12,950.
Net earned income: $20,000
Standard deduction: -$12,950
Taxable income: $7,050
For 2022, a single taxpayer with a taxable income of $7,050 falls within the 10% tax bracket, so the federal income tax owed would be 10% of $7,050, which is $705.
2. For the Earned Income Tax Credit (EITC), the maximum credit amount in 2022 for a single taxpayer with no children is $543. However, the exact credit amount depends on your earned income and filing status. You may use the IRS EITC Assistant tool (https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant) to determine the specific EITC amount you are eligible for.
In summary, based on the information provided, you would owe $705 in federal income tax, and your EITC amount may be up to $543 if you qualify. Be sure to check the specific EITC eligibility requirements before claiming the credit.
Comment from reviewer
Some very slight differences in amounts from 2022 tax tables ($708 instead of $705 for federal tax due and $541 instead of $543 for earned income tax credit) which did not affect the remainder of the answer.
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