The Earned Income Tax Credit (EITC) Can be used for the basis of building wealth:

Here is how it works;
If you have at lease one child that lives with you over half the year, you may be eligible for this credit. It is set up so that the more money you earn, the higher the credit until you reach an income of $8,050 for one child or $11,300 for two or more children. The credit peeks at $2,747 for one child and $4,536 for two or more children. Therefore the credit can increase your income by 34% to 40%.

The credit then levels off then decreases as income increases but don’t stop striving to increase your earned income. Other credits come into play that I will show you latter that will help make up for the reduction in the earned income credit.

In this first example we can see how much a family of four may benefit from the. (EITC)

Income $16,000
Tax 0
Earned income credit 4,280
Total income $20,280

The (EITC) increases family income by $4,280 or about 25%

This lump-sum payment can become the basis for building wealth. Here are a few suggestions:
1. This lump sum can go a long way toward closing costs on a home purchase.

2. The IRS will allow you to receive up to half the credit along with your normal paycheck, when you complete a form W5. In this way the tax system helps you with the house payments.

3. The payment can be contributed toward a Roth IRA that can grow tax free for future needs.

Sometimes we need the funds to take care of everyday needs, but I would still encourage you to save as much as you can. In this way you can still start building wealth.

B. Child Tax Credit

As your income increases The Child Tax Credit provides additional help for working families. Let’s see how this works:

The child tax credit is divided into two parts:

1. The first part provides $1,000 per child under the age of 17 to reduce the federal income tax.

2. The second part is a refundable portion that is designed to provide additional cash for families as the (EITC) decreases.

Let’s take another look at the family of four in the first example and see how the child tax credit may increase the total available cash as income increases:

Income $16,000
Tax 0
EITC 4,280
Additional child tax credit 705
Total income $20,985

There are those out there that limit the amount that they work because they want to maximize the earned income credit. But as you can see in the example above as income increases and EITC decreases the additional child tax credit increases.

If the couple above stopped working when they had earned $11,300 so they could receive the maximum EITC of $4,536 their total income would have been $15,836. By continuing to earn income their total credits increased by $449 and they received a total of $5,149 additional income.
In the next example a family of four can increase their earnings by over 50% and still receive more than $4,000 in refundable credits after federal income tax.

The family earned $25,000 a year. The spouses filed married filing joint with two children under the age of 17 that live with both parents all year. The total income should look like this:

Income from wages $25,000
Earned income credit 2,385
Additional child tax credit 1,850
Total income $29,235

The total credits were reduced by a few hundred dollars but the total family income increased by $8,250.

Now let’s look at an example where the family’s income has doubled again: The married couple makes $50,000 a year, have two children under the age of 17. This family took my advice, purchased a home, sold it and moved up to a larger home, let us take a look at their income. They pay $10,000 a year in interest, $2,000 in real estate tax, $1,000 in state tax and have $5,000 in contributions.

Income from wages $50,000
Less contributions to IRA 5,000
AGI $45,000
Taxable income $13,800
Tax 0
Refundable credit 620

This family of four is now making over three times what they were making even with the earned income credit and they are still receiving a refundable credit. If they took the standard deduction of $10,300 instead of itemizing $18,000 their federal tax would be $474. They would still receive a benefit of a $2,000 tax reduction from this credit.

C. Children’s Exemption
Now let’s take the examples above and see more tax savings from using the child’s exemption:
In the first example the children’s exemption didn’t provide any tax reduction but the earned income credit and child tax credit provided $4,985 to the family’s income amounting to 34% of the family’s total income.

The second example each child provided $405 in tax savings in addition to the EITC and child tax credit, their total contribution to the family income is $5,045 or 17% of total income.
The third example the children provide $461.5 in tax savings each in tax plus the additional benefit of the child tax credit of $1,000 each. This represents a total tax savings of $2,923. In this example the children only contribute about 6.5% of the family income. In the next section we will take a look at another benefit that is provided in the tax code the standard deduction.

D. The Child’s standard deduction

Each child can earn up to the amount of their standard deduction without affecting the credits or having a federal tax liability.

In the last example the parents are self employed. The self employed pay double social security and Medicare tax and this tax is called self employment tax. On page 8 of IRS publication 15 (Circular E) under “Family Employees” it states that “Payments for the services of a child under age 18 who work for his parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a proprietorship or partnership where each partner is a parents of the child.”

The IRS doesn’t let you charge for food or rent to your minor child but think of the possibilities. You no longer need to set a college fund, date fund, car fund, in some cultures a mission fund. All of these expenses can come from the child’s own funds. In the following two examples let’s see how much you may save on just self employment tax. In this example $8,000 of deductible health insurance premium and HSA contribution has been figured in the calculation.

We will consider two examples the first we will see what tax is without the child working then in the second example we will how much is save by having the child work.

Income from self employment $75,000
Self employment tax 9,466
Federal income tax 3,967
State income tax 1,863
Child tax credit 2,000
Income after tax $61,703

In this example the children where worth $3,416, ($2000 child tax credit, $956 federal tax and $460 state tax) now let’s look at the other example where the children work for their parents and earn the amount of their standard deductions.

Income from Self employment $64,700
Self employment tax 8,011
Tax 2,466
State tax 1,209
Child tax credit 2,000
Sub-total $55,014
Child’s income 10,300
Total $65,323

In the second example the children contributed and additional $3,620, ($1,455 savings from self employment, $1501 federal tax, and $654 state tax). They contributed a total of $7,036 to the family. Another way to look at this is it only cost $3,264 for two employees; likely this is less than the allowances and expenses you would have if they weren’t working.

MCCrowther Tax Service commissioned Marvin Crowther to prepare this article as a service to the public in an effort to reduce the tax burden.

The website for MCCrowther Tax Service is http://www.mccrowtherassoc.com you may reply by email at listings@mccrowtherassoc.com

Copyright 2007
By Crowther Publishing

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1. Frugality. Being frugal is a key to financial prosperity. Teaching your children how to use coupons instills in them the need to be careful with money. Money saved is money earned.

2. Learning colors. The Sunday paper is very colorful and this is where the best coupons are. Your little children will get a better grasp of their colors if they are sitting with you while you thumb through the paper. Name the different colors as you go along.

3. Managing time. Many people use day planners but learning to use them can be cumbersome. If you are clipping coupons you should have an organizer. I have used the little baseball card dividers to keep my different coupons in. Show your children how this works. This will help them learn time management skills.

4. Mathematics. Your children’s math skills will really be enhanced while they learn to use coupons. Teach them to subtract the amount of the coupon from the price of products. Also they can quickly discover what deals are really deals by comparing different offers.

5. Learning to use a calendar. Couponing requires a calendar so consider getting one for each of your children. You can usually find them for free at your bank or credit union. Show your kids how to find the dates on the coupons and then in the calendar. This way your children can help you sort out coupons that are expiring.

6. Let your kids share in the savings. You can really get your kids motivated to help you by letting them share in the savings. You can then let them use their extra money for savings and things they want and need. Coupons can be found in many places and your kids will literally be creating this income for themselves.

7. Variety. Without coupons your meals can become very ordinary. Clipping coupons will expand your menu because you will be trying new products on a regular basis. Children thrive on variety as their minds can never get enough input. Take a chance and buy a few things each month you do not normally buy when you find a coupon for it. Your kids will love this.

Teaching your children with coupons will be a benefit to them and to yourself. Clipping coupons is a labor intensive process. If your kids are helping you then the job will be more enjoyable. Help the smaller ones learn their colors and teach the older ones how to make sure the coupons are really a good deal. Enjoy.

Get a complimentary e book about parenting by visiting Zacharias Allred’s site about teaching children [http://www.teaching-children.org]. You can also click on teaching children about money [http://www.teaching-children.org/teachingchildrenaboutmoney.html] to see other free articles.

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Tip #1: Keep Yourself Motivated.
Think back to when you were a child. If your teacher was not enthusiastic about what he or she had scheduled for class that day, how did you feel about it? It’s the same with young children today. If you, the teacher and often a role model for younger children, think this is a neat activity, then they will too!

Tip #2: Encourage.
Young kids thrive on praise and positive attention from the adults in their lives. If you want them to like you and be motivated in your class, you often just need to give them a lot of positive attention.

Tip #3: Play Games
Children learn through play. Oftentimes they don’t even realize they are learning if they are enjoying the game. Just think, children could sit there and fill out worksheet after worksheet or they could play an English game and learn the same concepts. Which would you rather do?

When I say English games I’m talking about games that are specifically designed to teach language and vocabulary. For example, you could turn using vehicle vocabulary into a relay game where children need to pick a card with a word and then run to a box of vehicles (or a stack of pictures of vehicles) and bring the correct one his or her classmates.

Here is another example: If you might normally give them a worksheet to write the correct verb next to the picture illustrating the action, have them instead practice their verbs by doing the action for the word you say or the word on a card that you hold up. Likewise, you could do the action and have them write down the word. You may access free samples of fun classroom games in the resource box below.

When you play games, you can use points and competition as a motivator, but not for kids under six who may find the competition too stressful. For them, just playing the game is motivating enough. You can also sometimes award extra credit, but use it sparingly so that it remains “extra” and a special reward. Also if you use it too much, children can have so much extra credit that it sways the actual grades too much.

Tip #4: Get Their Hands Dirty
Literally and figuratively. Children like to work with their hands and whatever you can do to get the items they are learning about in their hands is useful and fun for them. This can be anything from having a sensory table filled with sand and beach items when you want to teach them summer words to having them each bring in a piece of fruit when you are teaching fruit words. Anytime you can get young children up and doing instead of listening (often passively) you are getting their hands dirty in the learning process.

Tip #5: Get Them Moving.
Movement is a vital component to motivating children. The best way to prevent children from zoning out is to get them up out of their seats at least once each class period. Even if you just require them to come up to you instead of you going to them for help, the movement can help get them out of the trance that they sometimes get from sitting in one spot too long. Grouping the children for study projects and activities helps as well. If you can, let them move the desks around or sit on the floor to change things up as well. Many games involve movement without the children needing to leave their seats, such as miming, moving certain body parts and passing things around as part of a game or race. Therefore even teachers with large classes and no space to move can use this technique, albeit to a more limited degree.

Tip #6: Vary the Pace
Alternate calm games with lively ones to keep the children alert and motivated, but without letting the class get out of hand. Good discipline is essential to effective learning.

To read the full article on how to motivate children to want to learn English, please see the articles and tips section on the http://www.teachingenglishgames.com website in the resource box below.

Shelley Vernon has helped 1000s of teachers be an inspiration to their pupils and achieve results 2x as fast. Improve the effectiveness of your lessons by up to 80%. Receive free English language games now on http://www.teachingenglishgames.com The full article is on how to motivate children to learn is on http://www.teachingenglishgames.com/dirindex.htm

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Regardless of their chosen profession, what Tiger Woods, Dr. Benjamin Carson, Oprah Winfrey and Venus and Serena Williams have in common is not their race, money or level of education; what they have in common is good old fashioned, down-to-earth, excellent parenting. Most parents would like to believe that there is some type of magic in raising successful children because it relieves them from the guilt of not giving their children the proper spiritual, psychological, and emotional skills that they need to be successful in life. What do Beethoven, Thomas Edison, and Sigmund Freud have in common with Tiger Woods, Oprah Winfrey, Venus and Serena Williams and Dr. Benjamin Carson? You guessed it! Excellent parents. Quality parenting has nothing to do with whether or not a child is raised in a two-parent or single-parent home; what matters the most is the parent’s ability to instill in their child an impervious sense of self-worth, self-respect and self-love.

Listed below are the secrets to raising extraordinarily successful children:

Model appropriate behavior

1. Model the behavior that you expect from your child. Many parents believe that it is okay to tell their children, “do as I say and not as I do.” Studies show that if the parent smokes, there is a high chance that the child will also smoke. Don’t tell your children to read, when they have never seen you pick up a book. Don’t ask your children to clean their bedroom when your bedroom is a mess. I worked in the child welfare system for 13 years helping to reunite families. One of the most important lessons that I learned from working with parents whose children were removed from their home due to neglect and/or abuse is that even when parents didn’t think their children knew that they were using illegal drugs, drinking excessively, or having multiple sex partners; during family counseling sessions, the parents were surprised to learn that their children were always aware of their behavior and viewed them as hypocrites and liars. Do and be all of the things that you want your children to do and be.

Give them Self-esteem

2. Children see themselves through their parent’s eyes. When you smile at them they feel loved and accepted. Children are constantly looking into your eyes for approval and validation of their self-worth. Babies are capable of detecting their parent’s emotions that even the parent is not aware that they are emitting such as anger, guilt and sadness. If the parent refers to the child as dumb, stupid, or clumsy this is how the child will perceive herself. Do not call your child derogatory names because this becomes a part of their psychological dictionary of their self concept. Tell your child how wonderful, smart and intelligent he is. Tell her that it is okay to make mistakes and let them try again. Let the child help you make rules and consequences for breaking them for the home. Give them chores. Children, like adults, feel good about themselves when they feel that they are contributing to their own well-being to the best of their ability.

Teach Self-Discipline

3. Teaching a child to control their own behavior in spite of their moods or feelings is the greatest gift that a parent can give their child. Self-discipline will give the child the confidence to excel in every area of their life. Self-discipline is the skill that will help them understand when they have had too much to drink or that they need to get enough sleep at night to perform well on a test the next day. The secret to teaching self-discipline is to coordinate must-do-tasks with enjoyable activities. All children should have a study schedule. A time that is set a side just for doing homework. The study schedule should not conflict with their favorite television show, sports or other activities. Your child can reward themselves by spending time on their myspace account, talking on the phone or visiting friends.

Teach Critical Thinking

4. Teach your children to ask questions, gather facts and make decisions on their own regardless of the source of information. When you are watching cartoons or primetime shows with your children ask them if they think the show should have ended differently and why. Read stories to your children and ask them whether or not they think the story is plausible. Ask your child their opinion about various topics and ask them to support their answers with evidence. Giving your child the ability to think critically and analyze situations from various perspectives and viewpoints is the greatest gift that you could ever give them to live harmoniously in a multi-cultural society. When a child is able to critically think for herself and make rational sound decisions; they will be less likely to engage in sexual activity, use illegal substances or participate in gangs. They will be able to determine if their actions are taking them closer to their life goals or further from their life goals. Most importantly, they will not make their decisions based on whether or not they will be caught or punished by authorities; they will make their decision based on their conscience of what is right and wrong. Teach them that greatness is not always about having the right answers or pleasing others; greatness is about asking the important questions and doing what is right, even if you stand alone.

Sense of Purpose

5. Find out what your child is naturally good at and give them as many opportunities as possible to express their natural gifts and talents. Include these activities when helping them to do their home work. Study Howard Gardener’s 9 Types of intelligence and analyze which type of intelligence best fit your child. Read data about learning styles and determine if your child is a left or right brain learner, and how they best process data in terms of whether the information is auditory, visual or kinesthetic. Some children do not fit into society’s standard mode of intelligence and are labeled as academic poor achievers. However these same children may be gifted at building things, painting, drawing or creating music. It is important for parents to tell their children that they were born with the perfect physical and intellectual gifts and talents to make their dreams come true. Birds were born with wings to fly, not to swim under water. Let your children know that there is a special place in the world just for them. Teach them to appreciate who they are when no one is looking.

Mental Toughness

6. We have all heard the saying, “Sticks and stones may break my bones but word will never hurt me.” Yet, we all know, that nothing hurts the human soul more than words. I bet you can immediately think of three or more times that someone has said something to you that hurt you so deeply that you could not sleep at night. You teach your children to be mentally tough by telling them that the most important person’s opinion of them that matters is their own and secondly, would be the opinion of someone who loves them deeply. Tell your child that people with fake confidence only believe in themselves when they are winning or things are going their way. People with real confidence believe in themselves regardless of the outcome because they only focus on the things that they can control. Teach them that they can not control the grade that the teacher will give them after a test; they can only control how long they study and how well they prepare before the test. Teaching a child to be mentally tough is teaching them to focus on the things that they can control and to ask themselves honestly, “Did I do my best?” If they can answer yes. There next question should be, “What can I do differently next time?”

Compassion

7. Compassion is the universal language of feelings, emotions and morality. Teaching your child about compassion does not always include man-made laws and rules because these laws have created unspeakable conditions of human suffering such as slavery and what happened to the Jews. Teach your children that if they want to know how someone would feel or whether or not an act is right or wrong, tell them to ask themselves, “Do I want this to happen to me or someone I love dearly?” Their answer will connect them to the sincerest form of compassion that is connected to all of humanity.

Cassandra George Sturges MA, MA, Psy.D is a mother of two teenagers, a full-time psychology instructor, advice columnists for Today’s Black Woman Magazine, Seminar facilitator, author of “A Woman’s Soul on Paper” ISBN: 0595171435. Dr. Sturges is the author and publisher of Authentik Beauty Magazine. A 1 year subscription to Authentik Beauty Magazine is only $49.99 for 6 issues; mail request to: Authentik Beauty Magazine, P.O. Box 980679, Ypsilanti, MI 48197. Caution: Articles and clipart are sensuously and beautifully designed for a mature audience only. We accept cash, checks & all major credit cards. If you are seeking retail therapy or the perfect gift for someone else, I am an independent AVON representative, shop my website at http://csturges.avonrepresentative.com

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1. Thriftiness. Coupons can save some families $100’s of dollars every month. Being frugal is a major component in financial prosperity. Children learn that money can be saved with coupons and also the importance of making good purchases.

2. Learning colors. The Sunday paper is very colorful and this is where the best coupons are. Your little children will get a better grasp of their colors if they are sitting with you while you thumb through the paper. Name the different colors as you go along.

3. Managing time. Many people use day planners but learning to use them can be cumbersome. If you are clipping coupons you should have an organizer. I have used the little baseball card dividers to keep my different coupons in. Show your children how this works. This will help them learn time management skills.

4. Arithmetic. A big benefit that your children will realize is their math skills will be enhanced. Coupons teach adding, subtracting, division and multiplication. This will also show your children that what they are learning in school really can be used in the real world.

5. Calendars. Coupons usually have expiration dates and it is important to keep track of them. You can get a calendar for each one of your children for free at most banks and credit unions. Show them how to find the dates on the coupons and then in the calendars. You kids will really develop an interest in a calendar when they discover Christmas and their birthdays.

6. Pay your kids for good deals they find. This can be a great motivator for your children and will help them catch the “coupon clipping bug.” Show them your grocery list as it develops each month and they will start watching for coupons for the items you need to buy.

7. Spice up your menu. Menus at home can become stagnant and your kids may get tired of eating the same basic food. When you teach your children with coupons they will start letting your know different foods they would like to try. Normally you may not consider these choices so tell them that if the price is right you are willing to take a chance.

Teaching your children with coupons is very rewarding. They develop many skills and they will be a great help to you in your coupon clipping endeavors. You can divide the work among your children that is suitable to their skill level. After the clipping is done take them shopping and show them just how much is saved.

Get a complimentary e book about parenting by visiting Zacharias Allred’s web site about teaching children [http://www.teaching-children.org]. You can also select teaching children about money [http://www.teaching-children.org/teachingchildrenaboutmoney.html] to read other free articles.

Article Source: http://EzineArticles.com/?expert=Zacharias_Allred

As parents, we want the best for our children, and that includes providing them with the best start in their financial lives. What if I told you that it was possible to have built 17 years of excellent payment histories, with excellent credit scores to boot, BEFORE we went to college? What would it be worth to start your children and grand children’s lives with excellent credit and the opportunity to be knowledgeable about credit as minors?

The opportunity to do that is now. Follow these steps to create excellent credit for your children and help them begin their life journeys with everything they need:

1. Make sure you’re following the proper credit rules by developing your credit first. The habits that we adopt ourselves are also adopted by our children, so it is important that we are using the right habits and schedules to create excellent credit in order to pass those habits on to our children.

2. Add your children to your credit card. When you have excellent credit habits, adding your minor children to your credit card at a young age will give them years of consistent, excellent payment histories and excellent credit scores.

3. Play games with your children to make them familiar with proper credit use. Children love games and being interactive. Reality based board games that allow children to use money and credit to create excellent credit will prepare them for using credit when they become older.

4. Protect your credit standing, your children are counting on you! Make sure you create a time cushion between your payments so that if anything unforeseen happens, you have the leeway you need to pay your bills without interruption. With your children on your credit, they run the risk of having their credit ruined before they even get a chance to use it – take extra care with the way you protect your credit!

5. Take your child off of your credit card when they turn 18. At 18, your child can legally get a copy of your credit card in their name as a joint card holder and begin using your credit for purchases. The goal of adding your child to your credit is to start their lives with excellent credit and show them what credit is used for so that they care for it properly. You do not want to give them a gateway to your credit as a practice ground. The better prepared they are for the real world, the better care that they will take of their credit – their livelihood depends on it!

Following these tips will allow you to give your children the head start they need in life with readily accessible excellent credit at 18 years old. If we had that resource starting out, and the knowledge base to care for it, we could have avoided a lot of bad credit decisions and accomplished a lot more. Now you can provide your children the tools that will motivate them to care for their credit, and by knowing what the purpose of credit really is, they will accomplish the lifestyle they desire.

If you could find a book that was short and to the point, that gave you exactly what you needed to establish, restore or upgrade your credit, would it be worth adding to your library?

Pick up your copy of my 57 page, action-based guide Better Than Credit Repair. This book teaches the importance of developing your credit and what the purpose of credit is in the first place, how to properly use and care for your credit, and gives you step-by-step, action based instructions on establishing, restoring and upgrading your credit to excellent credit. Begin developing your credit toward something more today, for only $12.95. http://www.FreeCreditClass.org

As a special bonus, get two free dispute letters in the free eBook “How to Write a Dispute Letter” available by opting-in on the Credit Wealth Classes Incorporated Website.

Tamara Rasheed is the founder of Beating Life’s Plateaus, LLC, founder of the non-profit organization Credit Wealth Classes Incorporated, Personal Credit Development, and Qualified Professional Credit Specialist. She has spent the past 7 years as a Professional Educator, Professional Goal Setter and Life Coach. Ms. Rasheed has authored her own textbook based upon the Credit Wealth Class titled Better Than Credit Repair: Beating The Bad Credit Plateau with Personal Credit Development and has received an endorsement in 2007 from Michigan Works! Livonia Service Center backed by the Michigan Department of Labor and Economic Growth.

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