making work pay

[gman]

My software is automatically putting in the 400 or 800. Does anything need to be checked this year as to if they adjusted withholding during the year. Should every return have this amount included?

[Dusty2004]

What software

My software (Proseries) has the new form M and it has check boxes. If the taxpayer received the money from SS also it would lower their credit. The form knows also what the phaseouts for the credit are.

I hope that helps but if not ask again with more information.

Dusty

[Bees Knees]

Assuming they qualify for the credit, they get it. It is irrelevant how much, if any, was withheld from their pay. It's no different than getting EIC. If they qualify, they get it, regardless of how much was withheld.

[tilt53]

But we have some folks who collect Social Security and still work. If they received the $250 payment, then the credit is reduced by that amount.

[dyne]

It is my understanding that most of our clients who have earned income for a single taxpayer of $6451 or more or joint returns of $12,903 or more WILL get the $400 or $800 potential credit UNLESS they received the $250 Economic Benefit Payment during 2009 for one or both spouses in which case the $400 (or $800) credit will be reduced. Also the Certain Government Retirees who were NOT covered by FICA will be entitled to a potential $250 credit IF they did not receive the $250 Economic Benefit Payment. They could not make it simple.

[ChEAr$]

All very interesting.

case #1; earned income was about 7,000 on a joint return; both got their 250 and
there's nothing more to be gained on schedule m.

case #2; today, joint return again, one client had $2600 profit from business and husband
had about a 12,000 loss. AGI came to minus 10,000 give or take. neither draw social security. so that's not a factor. But still, no schedule m credit.!

case #3, not schedule m, but wife bought a house, personal residence. Yeah!
She wants the 8,000. But house only cost 65,000. BUT, she bought it from her
daughter and son in law. BAd news. And since she merely bought the house she and
husband had been living in (paying rent) for last 5 years, ... no other possibility.

Can't win em all.

Ain't taxes interesting?

[David1980]

My software is automatically putting in the 400 or 800. Does anything need to be checked this year as to if they adjusted withholding during the year. Should every return have this amount included?

It does not matter whether or not the withholding was adjusted.

For example, consider wage earner, has tax liability of $5000. Before the withholding adjustment/stimulus thing occured, he had his withholding set absolutely perfect, in that he would have exactly $5000 withheld.

Scenario 1: His withholding was adjusted (perfectly, for this example).
$5000 tax liability
$4600 tax withheld
$400 making work pay
$0 refund/balance due.

Scenario 2: His withholding was not adjusted.
$5000 tax liability
$5000 tax withheld
$400 making work pay
$400 refund/balance due.

Irregardless (I love using that word) of whether or not his withholding was adjusted, you prepare the return exactly the same way. If he had his withholding adjusted, the withholding on his W-2 will be less than if he didn't. Nothing else differs.

You still need to account for the possibility of the $250 credit for those who receive social security, etc... but the withholding adjustment itself is not relevant.

[erchess]

Harlan or Anyone

Why would it not have been advantageous for the couple in Harlan's Scenario Two to file separately? Then one member of the couple would have had a small return from Sch M (I realize not $250) while the other would have had a much bigger NOL to carry back and carry forward? It is late and the answer may be obvious to me when I have had some sleep but I'd still like to read the answer here.

[dyne]

My wife received her 1099-SSA from the Social Security Administration and it does NOT
show the $250 Economic Benefit Payment in ANY manner on the form.

[ChEAr$]

Why would it not have been advantageous for the couple in Harlan's Scenario Two to file separately? Then one member of the couple would have had a small return from Sch M (I realize not $250) while the other would have had a much bigger NOL to carry back and carry forward? It is late and the answer may be obvious to me when I have had some sleep but I'd still like to read the answer here.

Guess what Ed? That separately filing idea occurred to me late last night and I made
a note to check it out today at office. Trouble is, where IS that note? (grin

[tpnl]

Client owes

Because of withholding being adjusted last April, my client owes taxes. He is a dependent, so he does not qualify for the 400 making work pay. He owes $26, probably would have broke even if withholding was not reduced. (note, he is not mad about owing, just thinks the govt is dumb)

[Black Bart]

Me too, or

...Irregardless (I love using that word)...

that is, I used to. A few years ago I was sounding off all my available big words to impress my snooty, smart-aleck English teacher client. When I hit on that one he said "You probably think that's a classy word, but actually it's slang."

Check this link: http://dictionary.reference.com/browse/irregardless

It was immensely satisfying to charge him an extra ten bucks for the lip (although I didn't specify the cause) and the information.

[thomtax]

that is,
It was immensely satisfying to charge him an extra ten bucks for the lip (although I didn't specify the cause) and the information.

You contrary devil. And I suppose you spent the extra money buying a dictionary so that you could study and be correct in the future.

LT