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PostHeaderIcon Why do they make it so hard?

Really.

It seems like last Spring all I did was post endless rounds of updates and Q&As; for the stupid telephone tax deduction.

Now it’s the “economic stimulus payment”. Wonder what new stupid thing the IRS will throw at Americans next year?

If you are one of the many people confused by the economic stimulus payment, there’s a great article at accountingweb.com that helps clear things up.

For those of you who just want the gist, here it is:

  • Everyone with a social security number if eligible for the stimulus payments, whether they normally file a tax return or not.
  • For those who normally do not file a tax return, the IRS has created an expedited method to get them in the system so they can receive their payments.
  • This is not a rebate or refund. It is Advanced Payment of a taxpayer’s estimated 2008 refund.
    • This means that when you file your 2008 taxes in 2009, if the rebate amount is, say, $2000 and your economic stimulus payment was $1200, the actual rebate you will get next year will only be $800, or the difference between your rebate and the advanced rebate you already received.
    • On the other side, if your 2008 taxes show that you owe money, or your refund is less than the amount of the payment you receive this year, you don’t have to pay back the difference.
  • This is not taxable income. You will not have to claim it as such, though I am sure there will be extra hoops to jump through next year because of it.
  • If you haven’t filed your taxes, you can’t get a stimulus payment.
  • If you had your 2007 tax refund direct deposited in more than one account, you will have to wait for a check, which will be issued after the direct deposits, beginning in mid-May.

Those are the high points. More details are available at accountingweb, and at the IRS page I listed last week.

Honestly, what a pain!

I don’t the “Fair Tax” is a workable solution, but I loved the Flat Tax notion and wish someone would revive it. If only so I don’t have to post about the IRS so much every Spring! 😉

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