Reporting stimulus payments on 2008 return

[FEDUKE404]

Does anyone yet know what options will be available for determining the dollar amounts of taxpayer stimulus payments that were actually received for tax year 2008?

Form 1040, line 70 and its associated worksheet make reference to Notice 1378.

One would hope an online access and/or 800 number would be available for those folks who can't quite "remember" what they received. (Actually, I found in round #1 of a similar rebate a frequent response was "I never received any of those *#$(¢& George Bush rebates!!" when the true facts were frequently otherwise if past due taxes, child support, loans, or whatever had interfered.)

Also, is this logic correct: A taxpayer received zero stimulus payment upon filing the 2007 return due to going through the income limits (stock sale), but the 2008 return will go back to normal income levels that would have otherwise allowed the maximum stimulus payment. I assume the stimulus funds will arrive, albeit somewhat late, subsequent to the filing of the actual 2008 tax return?

FE

[JohnH]

Except for the very small number of people who failed to receive a rebate due to IRS errors, I don't have any sympathy for those who failed to receive their rebate because the owed back taxes, child support, etc. If they pay their bills they wouldn't have needed to worry about getting their government handout.

I'd tell them they shouldn't complain - in actuality they got their rebate in advance (before most of the rest of us), because they got a pass on whatever debt they incurred at some time in the past, either to the goverment or to their kids they won't support.

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But back to your main question, I expect there will be an online "lookup" just like there was the last time around. Something we can charge extra for if the client has a memory lapse.

I don't think it will be a separate check in 2009 - it will just be another credit similar to most of the other handouts on the existing return (EIC, etc), and the rebate credit will just fold into the final result on the 2008 return.

[solomon]

Just like old times.

https://sa2.www4.irs.gov/irfof/IRServlet?app=IRACTC&selectLanguage=en

[FEDUKE404]

Deja vu all over again!

I don't think it will be a separate check in 2009 - it will just be another credit similar to most of the other handouts on the existing return (EIC, etc), and the rebate credit will just fold into the final result on the 2008 return.

As I mentioned originally, it appears the "late" money will appear on the 2008 Form 1040, line 70.

And thanks to solomon for the link - it will come in handy!!

FE

[erchess]

Does anyone know yet what will be our obligation?

I know we have to ask each taxpayer how much he or she got. I know we have to use the relevant resources to erase any doubt expressed by a client. But do we have to do the look up for every client? Do we have to for each client either look up or have them sign a statement such as our organizer?

Does anyone know or even have an opinion on whether electronically filed returns will be rejected because of wrong info on the amount of Stimulus a person got?

I am presently weighing a fee of $25 for calling or going online to verify what each person got unless they want to admit getting the maximum or show me some proof that they got less. But I wonder how much business that would cost me to the numerous preparers in my area who will write on a return whatever they are told unless information documents they have to send in conflict with what they are told.

BTW am I correct in remembering that low income filers filing only to get the stimulus got at most $300 and if nothing has changed have no need to file this year? And am I correct in remembering that most people who had to file returns got $600 single, mfs, or hh and $1200 mfj as long as the tax on the 07 return was at least that much?

[David1980]

They could do a rejection. Or they could just refund the correct amount and create upset taxpayers because the taxpayer expected a larger refund (like seems to normally happen when a refund gets offset.)

I would hope most software is smart enough to automatically calculate the expected value for prior year clients. For new clients and prior years who claim to have received a different amount it's less than 1 minute to plug in the 2007 data on the IRS website to check, assuming the 2007 data is available.

I haven't decided how to handle new customer who doesn't have 2007 tax return and claims to not have gotten the rebate. All you need for the website is filing status and exemptions so as long as they know how many kids they claimed it _should_ be on the website but if not I'll probably just go with whatever they tell me, and if they get a smaller refund or owe more taxes well that's their fault.

[JohnH]

>>> I am presently weighing a fee of $25 for calling or going online to verify what each person got unless they want to admit getting the maximum or show me some proof that they got less. But I wonder how much business that would cost me to the numerous preparers in my area who will write on a return whatever they are told unless information documents they have to send in conflict with what they are told. <<<


Seems like the easiest thing to do would be to have the client fill out a simple statement listing how much Stimulus Rebate they received or were credited in 2008. That would provide documentation that the question was asked & answered. If there's any ambguity or lapse of memory on the client's part, then a reasonable lookup charge applies. As for the lookup itself, a bookmark to the site and having the 2007 tax return info on hand will be a 30-second exercise at most. For those who have more complicated situations (i.e. they didn't get a check & don't remember why not, but MAYBE they owed back taxes or child support) they can decide if they want to pay for research time to sort it all out.

The Stimulus Payment was a big deal for most taxpayers. The majority of clients will remember - I'd bet that 10% or less will either forget or will have some wierd situation that needs to be verified. Of that 10%, all but a few will be very easy to verify by simply clicking on the lookup. Overall, I don't think it's going to be much of a challenge.

[BOB W]

My UT program printed a Rebate worksheet last year that is part of the client's copy and mine. While working on the 2008 return I review the 2007, At that time I will pickup the 2007 stimulas amount. That is going to be the figure I will be using. If the client says it was different I will look into it futher, maybe at a fee.

[JohnH]

I'm guessing the discussion on this forum about handling the stimulus payment will be greater than the total number of clients who actually present a problem concerning accounting for it on their return.

[FEDUKE404]

Plan to check the stimulus amounts

I probably will run an internet check on every client.....for free.

The entire process takes at most a minute (less time than entering W2 information!), and it is time well spent for not having to repair/explain any later "problems" that occur because the client did not have the correct amount available.

Also, FWIW, there is always the possibility what your own 2007 software showed to be the planned stimulus payment might have been incorrect due to return changes by the IRS. My standard "send me everything the IRS sends you" statement often gets overlooked.

FE

[BOB W]

It is possible that your tax program may plug in the rebate amount form the 2007 calculation. That will be nice.............

[FEDUKE404]

Transferred numbers

It is possible that your tax program may plug in the rebate amount form the 2007 calculation. That will be nice.............

So far as I know it will, but the software is only working with the "projected" rebate amount. Not unlike picking up the prior year state refund for the front page of Form 1040.

For a few extra keystrokes, I don't mind verifying with the IRS. It's not unlike checking clients' property tax payments with my county's web site - many clients get confused (late payments from prior/into next calendar year) or even worse forget about some payments.

Since I don't work with Block, Jackson-Hewitt, or Liberty (my guess is they most likely block internet access anyway!!) my clients appreciate the extras and don't mind paying a little more for such small items in their overall fees. But I would NEVER do something as flagrant as charging $25 to "look up" a number. Call it personal preference, or whatever you wish.

FE