Latest IRS info on Stimulus rebate

[taxea]

got this in latest IRS bulletin

http://www.irs.gov/irs/article/0,,id=179182,00.html

basically it says that another version of 1040A for this purpose with retirees and low income that don't file will be made available. Wonder how long it will take our respective tax programs to get it onboard.

I would send the qualifying taxpayers to VITA or their local IRS office and have the volunteers fill out the form for them. With low income they don't need to be paying us the big bucks. taxea

[KBTS]

1040a

I received the IRS Newswire email notification of this yesterday. The IRS is not creating a new version of the 1040A, they have just posted a "mock up" example of what needs completed on the existing form. Here is the link to the IRS example form:

http://www.irs.gov/pub/newsroom/1040a.pdf

I had my first call from a senior citizen yesterday and referred them to the local senior center for help.

[Possi]

example 1040A

I received the IRS Newswire email notification of this yesterday. The IRS is not creating a new version of the 1040A, they have just posted a "mock up" example of what needs completed on the existing form. Here is the link to the IRS example form:

http://www.irs.gov/pub/newsroom/1040a.pdf

I had my first call from a senior citizen yesterday and referred them to the local senior center for help.

I looked at the example and I have a question about self employment income on Line 7.

Why would self employment ever go on line 7?

Leads me to a question my client had about her parents babysitting her children. She pays for and takes the deduction for child care expense and wanted to know if paying her parents would cause them to have to file a tax return, since their income is so low.

Seems they paid their grandmother plenty to babysit, and took the deduction never filing a return for grandma.

Is that ok? I've never heard of this....

[Jesse]

If grandma goes to kids house follow the household employee rules.

If kids go to grandmas she should be filing sched C but often because you can deduct a percentage of you home expenses income is lower.

But in either case you may have FICA/Medicare taxes either through the employer as household employee or SE tax on Sched C.

[taxea]

Latest IRS info on Stimulus rebate

Sch C income does not go on line 7 for any reason. You have to look at Grandma's gross income, if that requires her to file a return and the net babysitting is 400. or more then she has to file a return. Whether taxpayer qualified for the credit depends on whether or not the care giver is also a dependent of the taxpayer....see payments to relatives. taxea

[Possi]

thanks!

thanks, taxea!