"2008 stimulus check causes tax confusion" by Common cents / LJWorld.com

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2008 stimulus check causes tax confusion

Many people are busy filing their income tax returns this time of year and the federal Internal Revenue Service is finding a large number of errors on early returns.The errors involve how to account on 2008 returns for last year’s economic stimulus payments.The stimulus payments affect taxpayers’ eligibility for the recovery rebate credit, a special one-time benefit that nearly 119 million Americans received last year in the form of the stimulus payment.“Taxpayers should not report the stimulus payment directly on their tax return,” IRS spokesman Michael Devine said. “They should only use that figure to calculate the recovery rebate credit and if they are not sure what number to use, let the IRS calculate the credit.”Most taxpayers who received a stimulus payment are not eligible for the rebate credit. People who earned more or less in 2008 than in 2007, added a qualifying child or ceased being a dependent in 2008, may qualify for some or all of the new credit. Seniors and retirees who did not file for a stimulus payment last year may qualify.Some filers think the stimulus payment received last year has to be paid back, is taxable or lowers their refund. None of that is true, Devine said.Be wary of car warranty phone callsThe Better Business Bureau of Northeast Kansas warns people to be extremely wary of telemarketing calls and mailers claiming that their automobile warranty has or is about to expire.Better Business Bureau research shows that the consumer is actually being sold an extended service contract and despite the impression given, the offer is not associated with the car manufacturer’s warranty.

By Mike Belt

February 9, 2009

Common cents