Federal Insurance Contribution Act (FICA)

10 Jan 2013: If you run a business, the law makes it mandatory that you withhold and pay to the government your workers’ income taxes and workers’ share of Federal Insurance Contribution Act (FICA) taxes on their salaries. And since more often than not, this task is undertaken manually, the chances of human error are quite high. If you have made a mistake in your worker’s employment tax, you would need to correct it. If you discover your mistake within the same year in which the error occurs, then correcting it would be easy.

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Earned Income Tax Credit (EITC)

3 Jan 2013: The Earned Income Tax Credit (EITC) is a tax credit for the lower to middle income group earners. The criteria to be eligible for the EITC is that you must be a US citizen with a valid Social Security number or a resident alien all year or a non-resident alien but married to a US citizen or a US resident alien filing a joint return. In addition, you cannot be a married person filing a separate tax return and you must not be a qualifying child of another taxpayer.

As far as income is concerned, you have to be earning your wages either as an employee or operating your own business or a farm. If you have children, you must either have a qualifying child or be above 25 and below 65 years of age if you are childless. You must have lived in the US for at least 6 months and not qualify as a dependent of another person.

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