Just electronically filed the first 2009 tax return of my tax season. All went swimmingly well considering I am studying a 5 dvd, 600 page tax update manual of all the law changes.  I am not complaining though.  It is the nonstop tinkering with the tax code that makes life interesting for practitioners.

Monday will spend all day attending tax court class and observing actual tax court cases in the Portland US Tax Court.

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Accounting Web has an article about the new duties the IRS will have regarding the new health care insurance reform bill:

Monitoring compliance. Taxpayers will have to provide proof of coverage with their annual federal tax returns. Failure to comply will result in a penalty, payable to the IRS.

Distributing new government subsidies to low-income individuals through newly created state exchanges.

Overseeing small business tax credits to help qualifying businesses provide insurance to employees.

Assessing a tax on insurers that provide insurance benefits that are high-cost, or “Cadillac” plans.

Enforcing penalties for improper distributions from Health Savings Accounts, which Kaiser says will increase under the new plan.

Overseeing the demand that not-for-profit hospitals live up to their “charitable missions” by doing a “charitable needs assessment” once every three years.

Regulating contributions to Flexible Spending Accounts, which Kaiser estimates will be limited.

Is the IRS up to the task?

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Brad Shannon of the Olympian outlines new taxes being contemplated for Washington State to help with the budget crisis:

• Closing the exemption for door-to-door sales of consumer products
• Add $1 to the state’s $2.025-a-pack tax on cigarettes
• Tax on bottled water
• Sales tax on candy and gum
• Closing a sales tax exemption for some out-of-state residents who buy products in Washington
• Temporary sales tax increase or expanding the sales tax to professional services
• Sales tax on services (lawyers, engineers, detectives, security brokers, credit agencies, insurers)
• Income tax on high-wage earners
• $1.50-per-barrel tax on oil (3.5 cents a gallon on fuel)

Unless a miracle happens and the economy picks up dramatically, you can be sure higher taxes are coming your way one way or another.

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2 Comments

• At January 13, 2010, Angie in WA State wrote:

  I am not surprised, nor, to my own amazement, unable to see the necessity for these increases. Better to spread the pain, than to simply add on to home property taxes (those have already increased, at least for me, over 300% since about 1995).

  The one that I am most surprised to see is Closing a sales tax exemption for some out-of-state residents who buy products in Washington. It's about time the State of WA quits trying to fool anyone that those border-state (Portland, OR) shoppers will fail to buy in our state if we stop letting them off the hook for the sales tax, most of them are over here shopping for food, anyway, and in our state, that comes tax free (for food for home cooking and consumption, anyway). WA workers have been paying (at least 9%) in income tax to the state of Oregon for decades now, it's past time we reciprocate.

• At March 8, 2010, Christina Theis wrote:

  Another $1 added to a pack of cigarettes is just ridiculous.There simply have to be other ways to generate revenue than yet another sin tax. It is vaugely remenicent of the way the marajuana was slowly criminalized, starting by creating miles of red tape with contradictory rules,making it absurdly expensive and then slowly backing flawed medical information declarying it "dangerous" and "addictive". While smoking cigarettes is certainly a health risk this unfair taxation is starting to feel punative instead of a legitamate tax.

  While there are smokers in all socio-econmic groups, the facts are this tax is placing the burden largely on the shoulders of those who can afford it the least. Add a dollar to your morning latte and THAT would be equitable.

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Determining your filing status for tax purposes is easy, right?  If you are single with no children, yes.  However sometimes the correct filing status can be tricky.

You can be married the entire year but if your are legally divorced on New Year’s Eve, you are considered single for tax purposes for that year.  Even if you are married, you can file as head of household under certain circumstances if your spouse did not live with you for the last half of the year.  If your spouse dies during the year, you still file as married even though you may be legally single on the last day of the year.  If you are married, you can choose to file “married filing separately”.   Oftentimes doing so will result in higher total taxes for you and your spouse but there are special circumstances your taxes will be lower or when you want to legally insulate yourself from your spouse’s tax obligations.

And recently mixing things up even more for filing status determination are same sex marriages.  These marriages are not yet recognized at the Federal level but in certain circumstances (as in Oregon), these marriages are recognized for state income tax purposes.  This requires filing different sets of tax returns for Federal and State tax purposes.

Consulting a tax professional will help make sure you are using the legal and best filing status for your circumstances.

From the IRS today:

IRS TAX TIP 2010-03

Eight Facts About Filing Status

Everyone who files a federal tax return must determine which filing status applies to them. It’s important you choose your correct filing status as it determines your standard deduction, the amount of tax you owe and ultimately, any refund owed to you.

Here are eight facts about the five filing status options the IRS wants you to know in order to choose the correct filing status for your situation.

1. Your marital status on the last day of the year determines your marital status for the entire year.
2. If more than one filing status applies to you, choose the one that gives you the lowest tax obligation.
3. Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law.
4. A married couple may file a joint return together. The couple’s filing status would be Married Filing Jointly.
5. If your spouse died during the year and you did not remarry during 2009, you may still file a joint return with that spouse for the year of death, provided the joint return election is not revoked by a personal representative for the deceased spouse.
6. A married couple may elect to file their returns separately. Each person’s filing status would generally be Married Filing Separately.
7. Head of Household generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.
8. You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2007 or 2008, you have a dependent child and you meet certain other conditions.

There’s much more information about determining your filing status in Publication 501, Exemptions, Standard Deduction, and Filing Information. Publication 501 is available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

www.youtube.com/watch?v=xtXvCX3Tn24

Issued by the IRS today.

Click to enlarge

Click to enlarge

Here is the entire 2009 IRS Pub 17.

However because of this tax credit he made offers on about 12 different houses  all of which were bid up by other $8000 eligible buyers and was outbid.  This means that in actuality he had to pay more than the market value for his home because the US government was propping up the price due to the tax credit.  So what will happen next year?  The prices will probably come back down after the tax credit expires ultimately causing my son to lose $8000 or more in house equity.

Does this really help the housing market or just delay the inevitable?

Now Congress has passed a $6500 tax credit for people that have already owned a residence for 5 years (out of the last eight years).  This gives homeowners an incentive to put their house up for sale and buy a new one.  Does this help the housing market?  No.  Most will sell their existing home in order to buy a new one so the net effect on housing demand and therefore housing prices will be zero.  It certainly will accelerate the number of homes sold helping realtors, title companies, new home builders, mortgage companies, banks, etc.  Since it does not increase housing demand it will only serve to temporarily pump up real estate activity at the expense of deficit spending.  In other words it will only churn dollars and temporarily enrich employees in the real estate acquisition businesses (haven’t we bailed out the banks enough?).  Not a fair or wise move in my opinion.

What are we doing?

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Click here to view the embedded video.

Theoretically speaking that is.   This is to clear up some confusion regarding the recent “tax cut” that became effective April 1, 2009.

• You will not be getting a physical check as was done previously.  The tax reduction is reflected in your paycheck withholdings.
• Everyone with earned income is eligible for the tax reduction (unless you have too much income).
• The withholding tables were adjusted effective April 1st 2009 to increase the take home pay of those that are eligible.
• The credit is $400 for single filers and $800 for married filers however it cannot exceed 6.2% of your earned income.
• If you make too much money you do not get the credit, it is phased out beginning at $75,000 for single filers and $150,000 for joint filers.
• The credit is “refundable” which means that even if you owe no tax but are otherwise eligible, you will get the credit and a refund check will be issued when you file your return.
• The credit is effective for the 2009 and 2010 tax years.

Any questions?

Solar water heater on a rooftop in Jerusalem

The recent stimulus bill passed by Congress and signed by the President re-instituted home and business energy tax credits that expired at the end of 2007.  The new tax credit has a lifetime cap of $1,500 and on 30 percent of  the cost of qualifying improvements made to your home residence in 2009 and 2010.  Here is a list of smaller improvements that may qualify:

• Exterior Windows
• Storm Windows
• Skylights
• Exterior Doors
• Storm Doors
• Roofs (metal or asphalt)
• Insulation – Includes seals to limit air infiltration, such as caulk, weather stripping, and foam sealants
• Central A/C
• Air Source Heat Pumps
• Furnace (Natural Gas, Propane or Oil)
• Hot Water Boiler (Gas, Propane, or Oil)
• Advanced Main Air Circulating Fan
• Water Heater (Gas, Oil, Propane, or Electric Heat Pump)
• Biomass Stove

There is also bigger improvements that qualify like solar and wind energy improvements.  The property must be certified by the manufacturer in order to qualify and a certification statement must be included in the packaging.

WASHINGON — The Internal Revenue Service today reminded individual and business taxpayers that many energy-saving steps taken this year may result in bigger tax savings next year.
The recently enacted American Recovery and Reinvestment (ARRA) of 2009 contained a number of either new or expanded tax benefits on expenditures to reduce energy use or create new energy sources.

The IRS encouraged individuals and businesses to explore whether they are eligible for any of the new energy tax provisions. More information on the wide range of energy items is available on the special Recovery section of IRS.gov. For a larger listing of ARRA’s energy-related tax benefits, see Fact Sheet 2009-10.

Tax Credits for Home Energy Efficiency Improvements Increase

Homeowners can get bigger tax credits for making energy efficiency improvements or installing alternative energy equipment.

The IRS also announced homeowners seeking these tax credits can temporarily rely on existing manufacturer certifications or appropriate Energy Star labels for purchasing qualifying products until updated certification guidelines are announced later this spring.

“These new, expanded credits encourage homeowners to make improvements that will make their homes more energy efficient,” said IRS Commissioner Doug Shulman. “People can improve their homes and save money over the long run.”

ARRA provides for a uniform credit of 30 percent of the cost of qualifying improvements up to $1,500, such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems. The new law replaces the old law combination available in 2007 of a 10-percent credit for certain property and a credit equal to cost up to a specified amount for other property.

The new law also raised the limit on the amount that can be claimed for improvements placed in service during 2009 and 2010 to $1,500, instead of the $500 lifetime limit under the old law.

In addition, the new law has increased the energy efficiency standards for building insulation, exterior windows, doors, and skylights, certain central air conditioners, and natural gas, propane or oil water heaters placed in service after Feb. 17, 2009.

IRS guidance issued before the enactment of ARRA will be modified in the near future to reflect the new energy efficiency standards. In the meantime, homeowners may continue to rely on manufacturers’ certifications that were provided under the old guidance and on Energy Star labels for exterior windows and skylights in determining whether property purchased before June 1, 2009, qualifies for the credit. Manufacturers should not continue to provide certifications for property that fails to meet the new standards.

The new law also eliminates the cap on the 30 percent tax credit for alternative energy equipment, such as solar water heaters, geothermal heat pumps and small wind turbines, installed in a home. The cap generally has been eliminated for these improvements beginning in the 2009 tax year. The IRS today issued Notice 2009-41, which explains the effects of this change.

HAPPY EARTH DAY!

Below is from Energy Star.gov

SUMMARY OF TAX CREDITS FOR HOMEOWNERS

Product Category	Product Type	Tax Credit Specification	Tax Credit	Notes
Windows & Doors	Exterior Windows and Skylights	*Important Change: Before June 1, 2009: Must meet ENERGY STAR criteria After June 1, 2009: U factor <= 0.30 SHGC <= 0.30	30% of cost, up to $1,5002	Not all ENERGY STAR labeled windows and skylights qualify for tax credit. More information
	Storm Windows	Meets IECC1 in combination with the exterior window over which it is installed, for the applicable climate zone	30% of cost, up to $1,5002	Manufacturer Certification Statement3 will list classes of exterior window (single pane, clear glass, double pane, low-E coating, etc.)4 that a product may be combined with to be eligible in specific climate zones.
	Exterior Doors	U factor <= 0.30 SHGC <= 0.30	30% of cost, up to $1,5002	Not all ENERGY STAR doors will qualify. More information
	Storm Doors	In combination with a wood door assigned a default U-factor by the IECC1, and does not exceed the default U-factor requirement assigned to such combination by the IECC	30% of cost, up to $1,5002
Roofing	Metal Roofs, Asphalt Roofs	ENERGY STAR qualified	30% of cost, up to $1,5002	All ENERGY STAR metal and asphalt roofs qualify for the tax credit. Must be expected to last 5 years OR have a 2 year warranty.
Insulation	Insulation	Meets 2009 IECC & Amendments	30% of cost, up to $1,5002	For insulation to qualify, its primary purpose must be to insulate (example: insulated siding does not qualify). Must be expected to last 5 years OR have a 2 year warranty
HVAC	Central A/C	Split Systems: EER >=13 SEER >= 16 Package systems: EER >= 12 SEER >= 14	30% of cost, up to $1,5002	For a list of qualified products, go to the Consortium for Energy Efficiency product directory , click on Air Conditioners, then in the “CEE Tier” enter “Residential Advanced Tier 3” for CAC Split Systems, and “Residential Tier 2″ for CAC Package Systems and ASHPs. Note — not all ENERGY STAR products will qualify for the tax credit. View ENERGY STAR criteria.
	Air Source Heat Pumps	Split Systems: HSPF >= 8.5 EER >= 12.5 SEER >= 15 Package systems: HSPF >= 8 EER >= 12 SEER >= 14	30% of cost, up to $1,5002
	Natural Gas or Propane Furnace	AFUE >= 95	30% of cost, up to $1,5002	For a partial list of qualifying products go to: Air-Conditioning, Heating, Refrigeration Institute (AHRI) Not all ENERGY STAR products will qualify for the tax credit. View ENERGY STAR criteria for furnaces, boilers.
	Oil Furnace	AFUE >= 90	30% of cost, up to $1,5002
	Gas, Propane, or Oil Hot Water Boiler	AFUE >= 90	30% of cost, up to $1,5002
	Advanced Main Air Circulating Fan	No more than 2% of furnace total energy use. Read this FAQ if the fan qualifies, but the furnace does not.	30% of cost, up to $1,5002
Water Heaters	Gas, Oil, Propane Water Heater	Energy Factor >= 0.82 or a thermal efficiency of at least 90%.	30% of cost, up to $1,5002	All ENERGY STAR gas tankless water heaters will qualify. There are currently no ENERGY STAR qualified gas storage tank or gas condensing water heaters that qualify. View ENERGY STAR criteria for water heaters. For a partial list of qualifying products go to: Air-Conditioning, Heating, Refrigeration Institute (AHRI)
	Electric Heat Pump Water Heater	Same criteria as ENERGY STAR: Energy Factor >= 2.0	30% of cost, up to $1,5002	All ENERGY STAR electric heat pump water heaters qualify for the tax credit.
Biomass Stove	Biomass Stove	Stove which burns biomass fuel5 to heat a home or heat water. Thermal efficiency rating of at least 75% as measured using a lower heating value.	30% of cost, up to $1,5002
Geo-Thermal Heat Pump	Geo-Thermal Heat Pump	Same criteria as ENERGY STAR: Closed Loop: EER >= 14.1 COP >= 3.3 Open Loop: EER >= 16.2 COP >= 3.6 Direct Expansion: EER >= 15 COP >= 3.5	30% of the cost	All ENERGY STAR geo-thermal heat pumps qualify for the tax credit. Use IRS Form 5695 Must be “placed into service” before December 31, 2016.
Solar Energy Systems	Solar Water Heating	At least half of the energy generated by the “qualifying property” must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household. The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling. The system must be certified by the Solar Rating and Certification Corporation (SRCC).	30% of cost	All ENERGY STAR solar water heaters qualify for the tax credit. Use IRS Form 5695 Must be placed in service before December 31, 2016.
	Photovoltaic Systems	Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.	30% of cost	Use IRS Form 5695 Must be placed in service before December 31, 2016.
Small Wind Energy Systems	Residential Small Wind Turbines	Has nameplate capacity of not more than 100 kilowatts.	30% of cost	Use IRS Form 5695 Must be placed in service before December 31, 2016.
Fuel Cells	Residential Fuel Cell and microturbine system	Efficiency of at least 30% and must have a capacity of at least 0.5 kW.	30% of the cost, up to $500 per .5 kW of power capacity	Use IRS Form 5695 Must be placed in service before December 31, 2016.
Cars	Hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles		Based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models	There is a 60,000 vehicle limit per manufacturer before a phase-out period begins. Toyota and Honda have already been phased out. Credit is still available for Ford, GM and Nissan. For more information visit: Fueleconomy.gov Use IRS Form 8910 for hybrid vehicles purchased for personal use. Use IRS Form 3800 for hybrid vehicles purchased for business purposes.
	Plug-in hybrid electric vehicles		$2,500–$7,500	The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits). Effective January 1, 2009.

¹Either the 2001 Supplement of the 2000 International Energy Conservation Code or the 2004 Supplement of the 2003 International Energy Conservation Code.

²Subject to a $1,500 maximum per homeowner for all improvements combined.

³A Manufacturer’s Certification is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.

⁴Additional information on exterior window features may be viewed at Anatomy of an Energy Efficient Window.

⁵Biomass Fuel means any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers.

The IRS defines “placed in service” as when the property is ready and available for use.

Efficient Cars

Starting January 1, 2009, there is a new tax credit for Plug-in hybrid electric vehicles, starting at $2,500 and capped at $7,500 for cars and trucks (the credit is based on the capacity of the battery system). The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits).

Tax credits are available to buyers of hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles. The tax credit amount is based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models. These credits are available for vehicles placed in service starting January 1, 2006. For hybrid and diesel vehicles made by each manufacturer, the credit will be phased out over 15 months starting after that manufacturer has sold 60,000 eligible vehicles. For vehicles made by manufacturers that have not reached the end of the phase-out, the credits will end for vehicles placed in service after December 31, 2010. See the IRS Website for updated information .

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www.youtube.com/watch?v=Ju3DTtCe4e0

Compressed Air Car Image via Wikipedia

The IRS just announced the new “above the line” tax deduction for the sales tax on the purchase of a NEW passenger vehicle contained in the latest tax bill just passed by Congress:

IR-2009-30, March 30, 2009

WASHINGTON — The Internal Revenue Service announced today that taxpayers who buy a new passenger vehicle this year may be entitled to deduct state and local sales and excise taxes paid on the purchase on their 2009 tax returns next year.

“For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase this year,” said IRS Commissioner Doug Shulman. “This deduction enables taxpayers to buy now and get cash back later on their tax returns.”

The deduction is limited to the state and local sales and excise taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle.

The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

IRS also alerted taxpayers that the vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010, to qualify for the deduction.

The special deduction is available regardless of whether a taxpayer itemizes deductions on their return. The IRS reminded taxpayers the deduction may not be taken on 2008 tax returns.

This deduction will help everyone (except those that are phased out due to their income being too high) that files a tax return and pays income taxes regardless of whether they have mortgage interest or can otherwise itemize their deductions.  Given the crash in new car sales for all car manufacturers, this might provide some incentive for buying a new car this year for those that are delaying their purchases due to the uncertain economic conditions.

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2 Comments

• At July 25, 2009, Living on Pretax Dollars in a Post Tax World, Part Three - How to Take Tax Deductions Correctly | Taxes Relief & Help wrote:

  [...] Significant 2009 Tax Break for Purchase of a New Vehicle (cpajohn.com) [...]

• At July 26, 2009, IRS Tax Debt and Benefiting From Tax Attorney Services | Taxes Relief & Help wrote:

  [...] Significant 2009 Tax Break for Purchase of a New Vehicle (cpajohn.com) [...]

Debt, Foreclosures and the Tax Law

The new year opens up with a podcast based on a topic that was part of a panel I was a part of at the Arizona Forum for Improvement of Taxation’s winter conference. I spoke with attorney Tracy Essig of Phoenix regarding these matters.

The materials can be downloaded at http://www.edzollars.com/ForeclosureDebtandTaxes.pdf .

The podcast is sponsored by Leimberg Information Service, found on the web at http://www.leimbergservices.com .

http://media.libsyn.com/media/ezollars/2009-01-17_DebtCancel.mp3

Special Report: Economic Recovery Bill Provides Social Security with Resources to Help Americans

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009. Among its provisions are one-time payments to Social Security and Supplemental Security Income (SSI) beneficiaries, as well as funding to help the agency address critical needs.

One-Time Payments of $250 For Social Security and SSI Beneficiaries

Nearly 55 million people who receive Social Security and SSI benefits will get a special one-time payment of $250. They should receive the one-time payment by late May 2009.

• • The payments will be automatic, so people receiving benefits do not need to take any action.
  • People who receive both Social Security and SSI benefits will receive only one payment of $250.
  • The legislation also provides for a one-time payment to recipients of Department of Veterans Affairs (VA) and Railroad Retirement Board (RRB) benefits. However, if a person receives Social Security or SSI benefits and also receives VA or RRB benefits, he or she will only receive one $250 payment. Social Security will send that payment.
  • In April, Social Security will send an advance notice with further information to each person who is eligible for the one-time payment.
  • So that we can issue the payments as quickly as possible, we ask that people not contact Social Security unless their payment is not received by June 4, 2009.

Meanwhile, we encourage people to visit www.socialsecurity.gov/payment for answers to frequently asked questions about the economic recovery one-time payments.

So Social Security recipients should receive a notice in April and the actual $250 payment in May.  You must have been eligible to receive benefits for November and December 2008 or January 2009.  In other words if you became eligible after January 2009 to receive SS benefits, you will not receive the payment.  The funds will be delivered the same way you currently receive benefits (direct deposit or paper check).

Please note also that $250 payment is tax free to the recipients.

39 Comments

• At March 8, 2009, All Free Video - Best of The Best » Blog Archive » Social Security Recipients to Receive 2009 $250 Stimulus Payment … wrote:

  [...] Url : http://www.cpajohn.com/2009/03/06/personal-taxes/social-security-recipients-to-receive-2009-250-stim... [...]

• At March 19, 2009, Rita Batt wrote:

  I currently have my 84 year old Mother with me, as she is house-bound and needs care. She filed an income tax return last year, just to receive the stimulus check. I personally mailed it in for her. She has never received a check. I am also on Social Security, and I received my check. I mailed both returns at the same time. What can she do to get the stimulus check that she had coming to her?

• At March 20, 2009, admin wrote:

  I assume you are talking about the 2007 tax return year filing. There is a provision to obtain the 2007 stimulus payment when you file your 2008 return if you did not receive it in 2007 (or only received part of the credit and now you are eligible for a further credit).

  I recommend that you file a return for 2008 for your mother and claim the credit on that return if based on her 2008 income she is eligible.

  If your mother in no longer eligible for the stimulus payment for 2008 based on her 2008 income, I recommend that you call or write the IRS concerning the status of the 2007 return and the stimulus payment that was claimed on that return.

• At March 22, 2009, Nick wrote:

  Does that mean people who receive SSI need to file a tax return also to get the credit plus the SSA $250 (that isn't needed to file anything)? Thanks.

• At March 25, 2009, Elizabeth wrote:

  This extra money is a God send! I'm on ssi and I have a teenage son who is going to the prom and will be graduating in May so this money is really going to help out ALOT!!!

• At March 27, 2009, Sue Quint wrote:

  All you can think about is spending the money on PROM? You must not really be that bad off. I am disabled and receive Social Security and I think of this as a God Send so I can buy groceries, and help pay my heating bill for the winter.

  I'm suprised you didn't say buy your son a video game, or a Wii, or to update your blackberry.

  How selfish!

• At March 27, 2009, John wrote:

  The $250 you will get without doing anything as long as you are eligible. If by the credit you mean the stimulus that was paid in 2008 based on 2007 return, you can file a 2008 return if you are eligible to get that credit and did not receive it in 2008.

  If by credit you mean the payroll tax reduction that is effective April 1, that will happen automatically in reduced tax withholdings in paychecks for periods after April 1, 2009.

  Hope this clarifies.

• At March 28, 2009, john ascot wrote:

  hey, mr. soc sec using the 250 for heating bill

  at this late time in your life,,,,,have you ever

  figured "different strokes for different folks".

  who cares what anyone will do as long as they

  spend the damn thing and get the economy rolling

• At March 31, 2009, Janet Gallmeyer wrote:

  I received my first social security check on March 10th, 2009. I understand that I am not elligible to receive the $250 stimulus on my social security deposit.

  I am retiring from my position on April 15th and have one paycheck left to be paid to me on April 15th.

  How will I receive my stimulus money?

  Thank you,

  Janet Gallmeyer

  Texas

• At April 3, 2009, sandra hiers wrote:

  amen-amen

• At April 10, 2009, shawnann dunkin wrote:

  My childern recive ss from their dads disability,will they recive a check?I am really confused.They did last time but i dont know about this time.Their payments are a form of child support,through social security.

• At April 10, 2009, RJ wrote:

  I recently began helping a sibling with elder care. God bless her, she has been carrying the load for many years and should have accepted help sooner as many things have fallen through the cracks.

  One of these items includes the stimulus payments that, if I understand correctly, my parents could have received in 2008 had we filed a 2007 return for them.

  Questions

  1. But were they, in fact, eligible in 2008? They are 94 and 87, and receive only Social Security and my father's civil service pension. Total amount is less than $25K for the household.

  2. If they were eligible in 2008, what options do I have to still help them claim that payment?

  3. I thought I could claim it for them by filing a 2009 return, but the 1040A instructions seem to indicate that they must first have wages/earned income of some kind, and can only then add in the SS and pension to arrive at the $3,000 minimum of qualifying income.

  4. Tangentially related: Is the property tax deduction available to people who would not normally file and who have only SS and pension income?

  I realize this very last minute, but as I mentioned earlier, I only just discovered the situation--as in early this morning.

  Any guidance is very much appreciated.

  Thank you, RJ

  P.S.I've spent most of today at the IRS web site trying to obtain these answers on my own, including starting to fill out the Free File forms.

  Having successfully filed my own taxes this year (including a Schedule C for my own business), I thought that finding the answers for my parents would be a snap. Ha! Big mistake in that assumption!

• At April 10, 2009, admin wrote:

  Social security qualifies as income for purposes of the $3000 threshold. You must file a 2008 return in order to claim the credit.

• At April 10, 2009, admin wrote:

  "4. Tangentially related: Is the property tax deduction available to people who would not normally file and who have only SS and pension income?"

  Yes it is available but if you do not owe any taxes it will not end up benefiting you.

• At April 11, 2009, diana wrote:

  Good Lord, Lady even Children who's mom and dads are on ssi deserve to go to the prom. you might just be selfish!

• At April 18, 2009, kenny wrote:

  I think what a person does with there check is there business stop being so judgemental, you want and need heat, she needs to make her son happy nothing selfish about that. Shame on you

• At April 21, 2009, CJ wrote:

  I think they can keep their stupid money. To many Americans feel the government owes them something and what ever happened to the idea that if you couldn't afford it you didn't get it theory? America is great but I'm sick of everyone thinking it owes them something for nothing.

• At April 21, 2009, Jane wrote:

  You won't get anything. If you couldn't afford to retire without the whopping BIG 250 you should still be working. What ever happened to the theory if you couldn't afford it you don't get it?

• At April 21, 2009, John wrote:

  @CJ, "Their stupid money" is actually your money assuming you have paid some taxes over the years or more accurately it is borrowed money that the government is one day probably going to tax back from us or our descendents.

  But I agree that giving seniors $250 as a way to stimulate the economy may not work. It makes more sense to me that the money be used to assist the car makers or give incentives to manufacture alternative fuel cars or some other new manufacturing project.

  We need to produce items that people will buy to rehabilitate the economy. Borrowing and spending will only take us eventually to the poor house.

• At April 25, 2009, PB wrote:

  My son who is 27 years old receives SSI because of his disability with Cerebral Palsy. Because he lives with us full time we are able to claim him as a dependent on our tax returns. Last year he did not receive the stimulus payment because we claim him as a dependent. Will he be eligible for the stumulus payment this year(2009)? I have elderly friends who received their letters this week letting them know of their eligiblity for this year's payment of $250. My son did not receive a letter. Does this mean that he is not elibile for the $250 payment?

• At April 25, 2009, John wrote:

  @PB, Yes your son should be eligible to receive the $250 payment as long as he received a SSI benefit in Nov 2008, Dec 2008, or Jan 2009.

  This link might be helpful in explaining the details.

• At April 29, 2009, admin wrote:

  Here is a follow up article at the Seattle Times.

• At May 3, 2009, mark wrote:

  yes if they are recieving off his account

• At May 4, 2009, Walt wrote:

  Hey Sue Quirky! or whatever, WOW! you have some gaul knocking on someone just for the fact that they decided to use their stimulus check for their sons Prom. Guess what LADY ... the prom is a big deal to these kids and just because you were most likely dogged at your prom "probably" because of your winning personailty" isn't anyones fault but your own. Its your own fault that you can't afford food or money for your heat ... work for it! and if your retired or older ... you should have saved for the future, not anyones fault but your damn self!!!

  @Sue Quint,

• At May 8, 2009, carolyn floyd wrote:

  IM HAPPY FOR EVERYBODY WHO WILL RECIEVE THE 250. CHECK SPEND WELL NOT ON DRUGS.

• At May 11, 2009, yvonn johnson wrote:

  I recieve child support. Will I get 250.00 from the stimulas package?

• At May 11, 2009, ke wrote:

  y child recives ssi since i did not file taxes does she still get the one time pand does it go off of your socail security number

• At May 13, 2009, RG wrote:

  Both of my twins (they'll be 14 this month) receive SSI for themselves, not through us. We have not received the letter in the mail saying they are eligible for the 250.00. On some sites I read they are eligible and others aren't. On that link of the Seattle paper that the admin posted it is really confusing. I don't know if thats pertaining if you received the big stimulus credit you wont get this or what. I just don't understand it. Please help! Thanks!

  Ramona

• At May 18, 2009, Kevin wrote:

  When will you get your money?

  Social Security is squeamish about specifying a schedule because it doesn't want to alarm folks who might not get the payment when they expect it. But you should get your money within a few days after you receive your regular monthly benefit. If your benefit is normally deposited into your bank account on the second Wednesday of the month, for example, the extra $250 should show up by the following Monday. (Be sure to adjust your balance accordingly.)

• At May 19, 2009, gwendoly session wrote:

  my husband recieves a check from the VA is he eligible for the 250.00 stimulus payment?

• At May 19, 2009, John wrote:

  @gwendoly session, He must have received a social security benefit last Nov, Dec 2008 or Jan 2009 to be eligible to receive the $250 stimulus payment.

• At May 20, 2009, Jodi wrote:

  @Sue Quint,

  The children of low income families are not immune to the needs and wants of other children. I consider prom and graduation expenses to be a perfectly legitimate use of this money. You, on the other hand, have heating bills every year and should include that cost in your routine budget planning.

• At June 23, 2009, antiguy wrote:

  @Walt, how old are you 14? i am on ssd and completely understand her outrage. though i do understand and agree that the 250 is yours and you are free to do whatever you want with it. it kind of burns to people who live from month to month barely making it.

  as far as it being her fault she has no money. SHE IS DISABLED YOU SOCIOPATHIC CRETIN. ill bet anything you are a republican! for many people in this country, disability comes through seeking medical help for years and encountering gross incompetence from medical 'professionals' until their disability is permanent and tragic. forget malpractice because in the case of this kind of gross incompetence finding a doctor who will commit to giving a written acknowledgment of it is like seeking the holy grail. especially since there is a two year window on malpractice suits even in the event of LIFELONG DISABILTY OR DEATH! SO HOW IS THAT HER FAULT IF THAT IS THE CASE?

  personally i had a 7 year period where i was misdiagnosed by dozens of doctors during which time i suffered three heart attacks which were misdiagnosed AND had had a social security doctor declare i was in good health and that my heart was fine and i was subsequently denied disability. less than three months later, i had another heart attack, a massive MI which was finally diagnosed and then i had a triple bypass, ALL BEFORE I WAS 40! (since then i have had another heart attack, three strokes,pulmonary embolism,CHF,etc. basically those doctors killed me and i am just waiting for it to be final) i had even gone to the administration offices of two of the hospitals i went to and told them i was not being diagnosed correctly. they did NOTHING to help! the fact is that most people in medicine do not care one bit whether or not you live or die as long as they get paid!

  and to top it off, we have to listen to freakish, unintellectual comments from things (i say things because you have no compassion or humanity and as such are not human) like you. your comments to that woman are thoughtless,uninformed and cruel. lucky for you that you have a computer to hide behind huh?

• At June 23, 2009, Walt wrote:

  @antiguy,

  Here... let me take the foot out of your mouth for you Mr. ...O’h you didn’t post a name... Antiguy, you don't even have the guts to use your first name... and you come at me with "good thing you got that computer to hide behind" Little hypocritical there ANTIGUY! Even though it's none of your business... I am also on SSA and have been for over 5 years now, and consider myself a Democrat if you must know... ANTIGUY. So you know, I’ll only reply to you once…. due to my rule of never getting into a battle of wits with someone that is unarmed. I really enjoyed hearing about your ENTIRE medical history also "NOT!” Just please keep your repulsive medical history to yourself… I was in a good mood until I read your post, Christ, now I feel like committing suicide for godsake. My reply to her back then was to try and somehow enlighten her on the issue that it’s none of her damn business what anyone else spends their money on… just because she’s in a bind does not mean she has the right to tell anyone where they should spend their money…. Maybe we should have that young boy stay home from the prom and he could cook her up a couple prime rib steaks… how about that? Maybe she would feel better then… knowing that the funds didn’t get spent on some dumb once in a lifetime experience that produces hundreds of memories that will in-turn be shared with others for years to come. I have degrees in Criminal Justice Law Enforcement and Management… and I know for a fact that over 30% of people whom eventually get approved for SSA and SSI are no more disabled then our President is. That accounts for hundreds of millions of dollars within a span of a year. Are you one of those people ANITGUY!? Maybe we should check into your past a little closer huh… what do think, yes? You seem quit articulate and have so much free time replying to posts throughout the internet…. Maybe we can get you a sit down computer job… sound good, or are you starting to feel chest pain again since I brought that up. It’s a good thing I have a computer to hide behind huh? …. email me antiguy, I’ll give you my resident address, oopps… or does antiguy mean you’re actually a woman whom is a Fanatic Freak who works for womens-lib.

• At June 26, 2009, beaves wrote:

  i am a veteran and i receive va disability i got a letter saying im going to receive the 250 dollar check, but i havent received it yet. i was wondering if anyone knew when they get sent out or when the final date to receive is. thank you

• At October 8, 2009, justin wrote:

  i am 20 years old my son was born with trisomy 21 (down syndrome) i am having a hard time finding steady work my wife cannot work due to our son needs so much attention we recieve ssi on him and sometimes thats all we have to try and pay the bills someone told us my wife could get benefits due to the fact she cant work because of our son adrien does anyone have any information on any of this

• At February 4, 2010, Shirley Propst wrote:

  We are an accounting firm, doing tax returns. Is there a site, as there was when the stimulus payments were made in previous years, where I can enter taxpayers social security number, etc and find out if clients on social security received the $250 economic recovery payment?

• At March 16, 2010, Mike wrote:

  @CJ, Americas Great no work from 1999 til still and things are going to get worse. If you didnt figure it out capitalizm went bankrupt and there is no bandaire big enough to fix it. Feel sorry for those who havnt gone broke yet. You all will get a taste of reality real soon!

• At June 23, 2010, Monica(Dorothy) Peterson wrote:

  @Rita Batt,

  Please know that I did not receive my stimulus Package of $250.00

  and would appreciate your sending it. I am a Social Security Receiptient.

  mmoniquedp@sbcglobal.net

Half million dollar house in Salinas, California

For those facing a foreclosure or a short sale on real estate,  here is a video from an IRS forum on the subject:

Debt Cancellation
Has your client received a 1099-C? Are you unsure how to handle it? Is your client in foreclosure? The tax treatment of cancelled debts is extremely complex and poses a significant challenge to affected taxpayers. A panel will discuss this pertinent topic and provide you with the tools you need to help your clients accurately report this item on their tax return.

This seminar was presented by the Taxpayer Advocate Service (TAS). It was filmed in July 2008, at the IRS Nationwide Tax Forums in Orlando, FL.

Please download Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals), to be able to follow the example in the seminar.

The seminar can be viewed here.

There is also more IRS information here.  If you are in this situation, my firm can assist you with the tax consequences.

$266 million is the amount of money the Internal Revenue Service is holding because the refunds checks were returned to the IRS due to the address for the taxpayer not being deliverable according to the post office.

Here is a four minute audio from the IRS explaining how you can track down your missing refund and how to avoid this from happening in the future.

Download audio file (undelivered_refunds_pod_110702.mp3)