How much of a tax rebate check am I getting from the economic stimulus package? March 5, 2008

Everybody asks about this tax rebate check thats coming soon because of the signed economic stimulus package. While on paper it looks good, there are some facts you need to know. Sadly, you may think you are getting it and you are not. So, let’s get the facts.

1. The good news. $600 for single persons. $1200 for married couple filing jointly. $300 a child.

2. The bad news. Single people it begins to phases out if your adjusted gross income is $75,000. Marrieds it is $150,000.

To illustrate – You lose 5% of the dollar amount above the applicable cap, such as $50 for each $1,000 over the threshold. For example, a married couple filing jointly with no kids and income for 2007 of $174,000 wouldn’t qualify for a Treasury payment this year. Neither would a single person (with no kids) and income for 2007 of $87,000.

3. For the majority of Americans, all you have to do is file your 2007 taxes.

4. The first payments will be issued in May according to the acting IRS commissioner

5. If you are a low income taxpayer please file your taxes even if you don’t have to or if you aren’t getting a refund. Thats because the IRS says “low-income workers or those who receive Social Security benefits or veterans’ disability compensation, pension or survivors’ benefits received from the Department of Veterans Affairs in 2007.” These guys will earn $300 (600 if married) if they had 3000.00 in income.

6. The perinnial extension filers read the next sentence. You will not get your refund until you file your taxes.

7. This refund will not be taxed as income.

More to come…

Can I claim ….? February 4, 2008

January and early February always brings out the best in tax clients. I am sure you have thought about asking your accountant some crazy questions but refrained  because they would feel like idiots. And you know what? I can respect that! I encourage that because 9.9 times out of 10 it is crazy and ludicrous. But for the majority that want to test out the patience, sanity and trigger finger of tax accountants I just want to give you a couple of hints of things not try. Here is the list.

1.  No your dog is not a dependant. I know you feed him and provide for him but it won’t work. Sorry I don’t make the rules.

2. Your sister’s kid is not eligible to be a dependant on your return just because she does not need them on their return this year. I don’t make the rules.

3. You made $15,000 in income and have 30,000 in mortgage interest. Ok. Listen. There is a possibility this could happen but the stars have to align right. Probably not the smoothest move on your return but if it’s truly legit ok.But this is asking for an investigation.And a thorough one.

4. It’s 2008 right now. No, you can not go buy a car and claim it on last year’s return now. There is a date on most receipts. This won’t fly.

5. Botox and Breast implants are usually not deductions.  Now, most woman probably just zoned in on the word “usually”. So when is it a deduction. There is a good shot if you are a stripper it will fly. That’s about all I care to talk about though. If you think of other ways please comment below.

6. You and your spouse don’t live together but you both want to claim the children. Who wins?  I am not a marriage counselor nor do I claim to be  one. So, you and your spouse need to work this out. Most divorce decrees have it outlined on them.  But if divorce is not in the picture please try and play nice.

7. You must have done the tax return wrong because I owe money. HA!  I love this one! Some accountants do make mistakes. Granted. However, you have 1 w-2 and you think it’s a mistake. Put the subpoena back in the purse. Check your w-4 at the office because they may not be taking enough taxes out of your checks.  This happens alot.

Feel free to give me some more of your favorites.