How does the federal tax system affect low-income households? Q.How does the federal tax system affect low-income households? A.Most low-income households do not pay federal income taxes, typically because they owe no tax (as their income is lower than the standard deduction) or because tax credits offset the tax they would owe. Some receive substantial rebates via refundable tax credits. However, nearly all low-income workers are subject to the payroll tax. Read more about How does the federal tax system affect low-income households?
What is VITA? Q.What is VITA? A.Low- and middle-income taxpayers may be eligible to receive free assistance to compute their taxes and file their returns electronically through the Volunteer Income Tax Assistance (VITA) program. Read more about What is VITA?
How do IRS audits affect low-income families? Q.How do IRS audits affect low-income families? A.The IRS audits a disproportionate (but still small) share of tax returns that include EITC claims. The agency has found that average discrepancies between taxes owed and taxes paid are smaller on EITC returns than on all returns. Read more about How do IRS audits affect low-income families?