If the retailers of the world had their way, everyone would spend their tax refunds on cars, furniture, and other fun stuff that they had kept their eyes on all year but had never been able to afford while living paycheck to paycheck. You have a better idea, though. You have spent your tax refunds on splurges every year since you have earned enough money to file an income tax return, and you are still as broke as you were when you started. 

This year, your plan is to use your tax refund toward something that will improve your financial situation in the long term. It is like when parents try to give children gifts that will help them financially, except that you have a better sense of what you need than the mother who gives her daughter a set of mason jars for Christmas based on the faulty assumption that her daughter has the time or energy to pickle her own vegetables or that she even likes pickles. 

For advice on how to put your tax refund to work building your creditworthiness or reducing your debt burden, contact an Oakland lawsuits, collections, and creditor harassment lawyer.

How Much Money Can You Get From the Earned Income Tax Credit This Year?

A tax credit is a discount off of your tax bill. It is even better than a tax deduction, which simply excludes some of your income from taxation. The earned income tax credit is available to people whose income derives entirely or mostly from employment; you are ineligible if you earned more than $11,600 in investment income in 2024. This year, the eligible income threshold for a single person with no dependents is $18,591, and for a married couple with no dependents, it is $25,511. The eligible income limits increase the more family members you claim as dependents on your tax return. For eligibility purposes, it does not matter whether the dependents are your minor children, adult sons or daughters, or elderly parents.

As for how much money you get, it varies according to the number of dependent minor children you have; other relatives you claim as dependents do not count in this calculation. If you do not claim any minor children as dependents, your maximum refund from the earned income tax credit is $632. The amount increases until filers with three or more dependent minor children can get a refund of up to $7,830.

Can the Earned Income Tax Credit Kickstart Your Financial Recovery?

As for spending your tax refund to better your finances, you can put it toward debt repayment so your credit score improves. If your credit score is abysmal, you can get a secured credit card and start rebuilding your credit slowly. You can even use your tax refund to file for bankruptcy.

Contact the Law Office of Melanie Tavare About Getting Out of Debt

A debt relief lawyer can help you use your tax refund to take steps toward debt freedom. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a case evaluation.