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All You Want To Know About Taxes

Posted by Bill on April 4, 2008

irs  PIAVA member Ann Fourt, a CPA, private investigator and all around smart person, summarizes and gives quickly digestible information about the Economic Stimulus Act of 2008. Do you have questions about how much $$$$ the government will send you for nothing? Do you want to know when you will get your $$$$$?

The Stimulus Payments – Things to Keep in Mind
Most of us have heard quite a bit about the Economic Stimulus Act of 2008. Over 130 million American households will receive stimulus payments beginning in May 2008. Retailers are already planning how to get us to spend it with them.

The basic outline of the program is that single taxpayers may receive a payment of $600, if their adjusted gross income (AGI) is no more than $75,000. The payment phases out by 5% for AGI exceeding $75,000 (for a taxpayer with no children, that means the stimulus payment goes to zero at $87,000 of AGI).Married taxpayers may receive a benefit of $1,200 if their AGI is no more than $150,000, subject to the same phase-out of 5% for AGI exceeding $150,000.

Taxpayers with children under age 17 at 12/31/07 may receive an additional $300 per dependent. Thus, for example, a married couple with two children under age 17 with AGI of $160,000 can still look forward to receiving a stimulus payment of $1,300.

Rather than trying to remember all these rules, you can take advantage of an online calculator that the IRS has created on its Web site that asks you for the relevant information, and then estimates what your stimulus payment will be. The online calculator is at IRS Calculator

You must file a 2007 tax return with the IRS to receive the stimulus payment, even if you owe no tax or are not required to file. You must have at least $3,000 of qualifying income (need not be taxable income), such as wages, self-employment income, nontaxable combat pay, Social Security benefits/Railroad retirement benefits, or veterans’ payments. The IRS has announced the timetable for the stimulus payments. Taxpayers who use direct deposit for their 2007 tax return refund will receive their stimulus payment up to two months earlier than those who do not.

For tax returns filed by April 15, 2008, taxpayers who specify that their 2007 tax return refund is to be direct deposited into a bank account will receive their stimulus payment the fastest, based by Social Security number as follows:

Last Two Digits of Social Security Number:

Stimulus Payment Deposit to your bank by:

00-20

May 2, 2008

21-75

May 9, 2008

76-99

May 16, 2008

If you will be receiving a paper check stimulus payment (see below for further on this), the following timetable applies:

Last Two Digits of Social Security Number:

Stimulus Payment Paper Check in the Mail by:

00-09

May 16

10-18

May 23

19-25

May 30

26-38

June 6

39-51

June 13

52-63

June 20

64-75

June 27

76-87

July 4

88-99

July 11

Some things to keep in mind about the stimulus payment:

      

 

 

  • If you select direct deposit for your 2007 income tax refund, the stimulus payment will automatically be deposited into that account.
  • If you do not request a tax refund by direct deposit on your 2007 income tax return, you will be sent a paper check.
  • If you’ve moved since filing your 2007 tax return, notify the IRS of your new address with Form 8822.
  • Even if you are not due a refund on your 2007 income tax return, filling out the bank account information will allow your stimulus payment to be direct deposited to your bank account.
  • If your 2007 income tax refund is to be direct deposited into an IRA account, your stimulus payment will be deposited there too.  Be careful with this!
  • If you use direct deposit for your tax return refund and your bank account information later changes, typically the stimulus payment direct deposit will be rejected.  After the IRS receives a rejection notice, the payment will be converted to a paper check and mailed to you.  This will delay your receipt of the payment.
  • If you choose direct debit to pay your 2007 tax bill, the account information will not be used for the direct deposit of the stimulus payment.  You will receive a paper check for your stimulus payment.
  • If you used direct deposit to split your 2007 income tax refund between several accounts, you will not receive your stimulus payment by direct deposit; instead, you will receive a paper check.  This will delay your receipt of the payment.
  • If you received a Refund Anticipation Loan (RAL) from your tax preparer, you cannot receive your stimulus payment by direct deposit and instead will get a paper check.
  • If you owe a balance due on your 2007 tax return that is less than the expected stimulus payment, you cannot use your economic stimulus payment to offset the balance due on your tax return.  If you delay payment of the tax balance due, penalties and interest will accrue between April 15th and the date the balance due is paid, regardless of the stimulus payment.
  • If you did not qualify for a stimulus payment based on your 2007 income tax return, you may qualify for a payment in 2009 based on your 2008 tax return.  The 2008 tax return instructions will include a worksheet to help you determine if you can obtain a benefit when you file your 2008 tax return next year.
  • If you have outstanding balances due from other tax years or for other obligations (such as child support), part or all of the stimulus payment may be used to pay past-due federal or state income taxes or non-tax federal debt such as student loans or child support.  If this occurs, you will receive a letter explaining how the stimulus payment was applied.
  • The IRS will be sending taxpayers two explanatory notices regarding the stimulus payment.  The first notice will inform recipients that the IRS is preparing to disburse payments beginning in May; the second notice will inform the recipient how much to expect in payment and when it should arrive.

 

 

 

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One Response to “All You Want To Know About Taxes”

  1. Leonardo said

    Aw, this was an extremely good post. Taking the time and
    actual effort to generate a very good article… but what can
    I say… I hesitate a lot and never manage to get nearly anything done.

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