Secure your tax rebate
Senior citizens, veterans encouraged to file Senior citizens, veterans encouraged to file a 2007 tax return to ensure receiving federal rebate
With the economic stimulus payment on the horizon, many people who might not normally file taxes should do so this year.
"We're concerned about those who don't have a filing requirement and haven't had one," Internal Revenue Service Spokesperson Judy Monahan said. "If they don't have a filing requirement, then we don't know how to reach them."
In February, the economic stimulus bill was quickly approved by Congress and President George W. Bush in an effort to reverse the economy's downturn. The package will phase in nearly $152 billion into the economy this year, followed by more than $16 billion in 2009.
"This bill is robust, broad-based, timely, and it will be effective," Bush said in statement. "This bill will help to stimulate consumer spending and accelerate needed business investment."
While most people will get their rebates without concern, others will have to take additional steps to ensure the arrival of their checks. Mainly, this will affect people who usually do not have to file a tax return.
"This applies to a number of people who might not file normally," Certified Public Accountant Mike Mohan said. "It affects the vast majority of people whose primary retirement is Social Security. They might not be required to file a return, but if they don't file a return, they won't get this rebate."
Meanwhile, the IRS is trying to notify millions of U.S. citizens by sending out informative letters this month.
"If you filed a tax return last year for 2006, you'll be getting a letter shortly from the IRS about these stimulus payments," Monahan continued. "If you didn't file a tax return last year because you had no filing requirement, you'll also get notification, but that could be at the end of the month."
Senior citizens, veterans and low income wage earners who, in 2007, made $3,000 or more in qualifying income could qualify for the rebate checks.
"They are allowing people who normally don't file tax returns to get at least a minimum amount of rebate - $300 per person in most cases," Mohan said. "That $300 per person is dependant on having received at least $3,000 each, or on a joint return, $6,000 of Social Security, veteran's disability or earned income."
While the usual tax return can take a great deal of time to complete, the IRS has simplified the process for many who usually don't file. The process is so easy, Mohan is encouraging patrons to do it themselves, rather than charging for his services.
"We've printed out a copy of the 1040A that we're handing out to people," Mohan said. "We're trying not to do these because we'd have to charge our minimum preparation fee, which is $82. So, we're trying to get people to do it on their own because there isn't much to it."
According to IRS, on a form 1040A, individuals should write "Stimulus Payment" across the top edge of the form. They need to enter their name, address, Social Security number and filing status. If the filer has one or more qualifying children, write their names and Social Security numbers under "Dependants" in the "Exemptions" section. Write the total amount of earned income for 2007 on Line 7 of the form. Total the three types of qualifying income and enter the total on Line 14A. From there, choose between a mailed check or direct deposit, sign and date the tax return and mail it to the designated IRS service center.
"Probably those who file electronically and choose to do a direct deposit, they'll get their refund faster. They'll get a separate rebate check probably in May. It will probably come faster," Monahan said. "Those who file on paper, it might be a little slower. Rest assured - in May, June, July - that's when those rebates are coming. It's a separate check from the refund check."
Aside from receiving the rebate checks, good news also comes in the form of the federal government not claiming the income as taxable.
"For federal tax purposes, it is not taxable income in 2008," Monahan said.
Whether the individual states choose to tax the rebate will remain to be seen in the 2008 tax calendar.
Tax help will take place at the Crook County Library on March 11 and 12. Get help filling out your tax forms on a first come first served basis from 9 a.m. to 3 p.m. Volunteers will provide information, but cannot do your taxes. Please bring W2s, 1099s, and any income documents for state and federal taxes. Also, sign up for free one-hour session from 12 to 6 p.m., and get help e-filing your taxes.
In addition, Accountant Mike Mohan is passing out free highlighted 1040A forms. Stop by 106 N Main St., or call 447-3299.