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Tax accountants, IRS urge citizens to file 2007 returns for rebate
The economic stimulus payments recently approved will be going out to approximately 130 million households but are causing many people to question whether they will qualify for the payment; and if so, how much they will receive. Suzan Gaster, an accountant and tax preparer, said she had printed out information from the IRS for her employees so they could answer anyone questioning them about the payments.
"I went to the Web site for the IRS and found the information," Gaster said. "I knew we'd be getting a lot of questions about this and I wanted to be prepared."
It is important to note that some people might qualify for the payment even if they are not required to file a return for 2007. However, in order to receive the payment a taxpayer must file the 2007 return, even if they would not otherwise have to.
"The tax payments are going to start in May so taxpayers need to file by April 15 to get it that early," Gaster said. "They can file an extension and not file until October but that would delay the payment until after the IRS gets their return processed. They payments are based on the 2007 return so you have to file it in order to get your stimulus payment."
Most people with a 2007 net income tax liability will qualify. This includes most people who get tax refunds. Families with children under 17 generally will qualify for an additional payment. Some people with no tax liability also will qualify. This includes Social Security and Railroad Retirement beneficiaries, recipients of certain veterans' payments, low-income workers with earned income and/or benefits of at least $3,000 and individuals who have combined income of at least $3,000 from any combination of these sources.
"Families with children under 17 will likely qualify for additional money," Gaster said. "How much the payment will be depends to a large degree on what your tax liability was."
Gaster said it was important for those who receive the payments to keep the letter the IRS sends out with it.
"They need to keep a copy of the letter the IRS sends them with the payment," Gaster said. "They'll need that for their 2008 returns."
The payment will not increase, or reduce, a taxpayer's tax liability but if a taxpayer owes the IRS money they may not receive a payment or their payment will be reduced by the amount they owe; the stimulus payment is treated as any other tax refund.
There are some people who definitely won't get a stimulus payment. You won't get a stimulus payment in 2008, if any of the following apply to you:
* You don't file a 2007 tax return.
* Your net income tax liability is zero and your qualifying income is less than $3,000. To determine your qualifying income, add together your wages, net self-employment income, nontaxable combat pay, Social Security benefits, certain Railroad Retirement benefits and certain veterans' payments.
* You can be claimed as a dependent on someone else's return. For example, this would include a child or student who can be claimed on a parent's return.
* You do not have a valid Social Security Number.
* You are a nonresident alien.
* You file Form 1040NR or Form 1040NR-EZ, Form 1040PR or Form 1040SS for 2007.
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