Three New Credits

[dyne]

My thanks to abctax and Burke for telling me about the draft for the new form M.
IF I understand it correctly the form M will only be required if the tax return reflects earned
income from wages, sch C or F or a k-1.The Making Work Pay Credit is allowable up to $400 for a single person or $800 for a joint return. However the $250 economic recovery payment for a single person or $500 for a married couple will REDUCE the Making Work Pay Credit. Then for those who are retired from being employed by the U. S. Government or state or local goverment and who receive a pension or annuity and who do NOT receive social security benefits will have the Making Work Pay Credit reduced by $250 credit each for a single person or $500 on a joint return if they both have such government annutities or pensions, etc. In addition if the return reports total income in excess of $75,000 for a single taxpayer or $150,000 for a joint return, the Making Work Pay Credit is reduced by 2% of the income which exceeds $75,000 or %150,000.. And how are we to know how much of these economic recovery payments were actually received during 2009? I understand that these amounts are NOT taxable. Perhaps the amounts will be reported on the annual Social Security statement.For clients who are retired and have NO earned income the form M will NOT be required. I believe that preparing this form alone will take an hour of our time. Do I understand this correctly?

[BHoffman]

If they take away my food stamps, I hope the garbage cans in my neighborhood have some gourmet left-overs.

I think everyone should get food stamps and an EIC if they make under $ 200.000 per year.

I have a restaurant client who will feed me in a pinch. Taxable barter on the larder.

[dyne]

The recovery rebate credit was only ONE computation and it turned out to be a lot
of trouble for us. For 2009 we must deal with THREE computations which I anticipate will be a pain!

[Burke]

http://www.irs.gov/pub/irs-dft/f1040sm--dft.pdf

This will be fun......

Downloaded and printed. It's really not that complicated.

[MLINDER42]

three new credits

Let us hope the software people do it correctly or it will be a big headache.

[abctax]

Preliminary form for reporting

http://www.irs.gov/pub/irs-dft/f1040sm--dft.pdf

This will be fun......

[taxxcpa]

Food stamps

is correct.

One fellow received his $250 social security check and found out his income or assets
were suddenly too much to receive his usual $300 food stamps for that month.

.

If they take away my food stamps, I hope the garbage cans in my neighborhood have some gourmet left-overs.

I think everyone should get food stamps and an EIC if they make under $ 200.000 per year.

[ChEAr$]

All of the above

I just realized how complicated the three new credits will make preparation of tax returns
become for this coming year.
1. The Making Work Pay Credit of 6.2% of earned income is not to exceed $400 for one
taxpayer or $800 for a joint return. BUT, this credit MUST be reported on the tax return
and the credit reduced by the two other credits listed below.
2. Those who received Social Security benefits during November of 2008 or SSI,
Railroad retirement and VA disability benefits will get a one-time payment of $250 during 2009
for each spouse who had such income or benefits. This is NOT taxable. Again the Making
Work Pay Credit above reduces the amount of the allowable making work pay credit in item 1 above.
3. Certain government retires who do NOT receive social security benefits will be entitled
to a one-time payment of $250 during 2009. This credit reduces the amount of the
Making Work Pay credit outlined in item 1 above.
It appears that we will be required to calculate all or part of this on the 2009 tax returns.

is correct.

One fellow received his $250 social security check and found out his income or assets
were suddenly too much to receive his usual $300 food stamps for that month.

Is this a great country, or WHAT?

Memo to Obama; don' t do us any more favors.

[dyne]

I just realized how complicated the three new credits will make preparation of tax returns
become for this coming year.
1. The Making Work Pay Credit of 6.2% of earned income is not to exceed $400 for one
taxpayer or $800 for a joint return. BUT, this credit MUST be reported on the tax return
and the credit reduced by the two other credits listed below.
2. Those who received Social Security benefits during November of 2008 or SSI,
Railroad retirement and VA disability benefits will get a one-time payment of $250 during 2009
for each spouse who had such income or benefits. This is NOT taxable. Again the Making
Work Pay Credit above reduces the amount of the allowable making work pay credit in item 1 above.
3. Certain government retires who do NOT receive social security benefits will be entitled
to a one-time payment of $250 during 2009. This credit reduces the amount of the
Making Work Pay credit outlined in item 1 above.
It appears that we will be required to calculate all or part of this on the 2009 tax returns.Actually
the heading should say: One New Credit with two reductions..