The Government may owe YOU Money – Be careful when doing your 2009 Taxes

While reviewing The Wall Street Journal’s Personal Finance Site, I came across a great article written by Tom Herman titled, “Early Filers Piles on Errors.”  Mr. Herman highlights

Most people who got a payment last year won’t qualify for an additional credit on their 2008 return. But millions of people who didn’t get anything, or got less than the full amount, are indeed eligible this year for the recovery rebate credit — if they can figure out how to decipher the rules and claim it.

As you may remember, in an effort to stimulate the economy in a keynesian way, the gov’t gave out checks for $600 per person, $1,200 per married couple, and $300 per additional eligible kid. This payment got “phased out”  starting at $75K for single filers or $150,000 for married filers (read the government thinks that if you made more than $75K that is too much to get “stimulated”).

Yeah Yeah I remember, I already spent that on (insert TV, Car Payment, Rent, Food, Health Care, bad ass rims lol) so Get to the Point Show me how the government Owes ME Money?

Alright this kind of gets confusing but we will take it really slow. Well, that payment was based on information you provided the IRS in 2007.  Despite some conspiracy theories out there it is unlikely the IRS has ALL your personal info and when that personal info changes (alright, maybe the NSA, FBI, CIA does, but not the IRS).  So, what happens if you got your check last June, but had a kid in July?  Mr. Herman explains,

What some people didn’t realize is that eligibility for a payment is based on your income and other factors, such as family size, reported on your return for either 2007 or 2008. That’s important. That means if you weren’t eligible because of what was shown on your return for 2007 or got less than the maximum amount, you still might qualify for a recovery rebate credit on your return for 2008, to be filed this year.

What should you think about when you meet your tax professional or use your fav. tax software?

  • Did I have a child in 2007 or 2008?
  • Did I get married in 2007 or 2008?
  • Did I make less than $75K in 2008?
  • Is my combined income (you and your spouse) now less than the combined max?  Did you make more than $75K but your freeloading spouse make $12K?
  • Did you lose your job in 2008?

This issue is so prevalent today that the IRS has a separate webpage discussing the issue!

Sweet! The Government owes me some cash! What do I do?

Lucky for us, the IRS states specifically,

The IRS Will Figure the Credit for You in Most Cases

You can let the IRS figure the credit when you file your 2008 Form 1040, 1040A or 1040EZ. If you’re filing on paper, simply follow the line-by-line instructions to choose this option. If you’re filing electronically, the software will figure the credit for you.

Did you forget how much you got? Don’t trust the guys at the IRS, your CPA, or the software you are using? Then click HERE.

NOTHING HERE IS TAX ADVICE JUST SOMETHING YOU SHOULD START LOOKING INTO! OR DOUBLE CHECKING YOUR ACCOUNTANT

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