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Date last modified:
01/11/10 |
March 2008 Newsletter
Federal Tax Rebates… The President recently signed an economic stimulus bill that provides for “recovery rebates” or “advance credit payments” for most taxpayers. To be eligible, you must file a 2007 Federal Tax Return, have earned income within certain limits and not be a dependent of another taxpayer. Qualifying taxpayers could receive checks for up to $600 per taxpayer plus an additional $300 per qualifying child under 17. All rebates will be based on information filed on the taxpayer’s 2007 return.
Provisions have been made for individuals making less than $3,000 of taxable income to also receive rebates. This includes people who receive only Social Security, veteran’s benefits or other non-taxable income. Individuals who normally do not have to file a federal tax return MUST file one in 2007 to receive a rebate check. The tax return must show the amount of non-taxable income the person received in 2007. Use the tax form 1040A and follow the instructions provided on the IRS website; use the “Rebate Questions?” link.
Taxpayers with dependent children under the age of 17 as of 31 December 2007 are scheduled to receive up to $300 per child. If divorced parents are exchanging the dependency deduction for a child, the parent who claimed the child on the 2007 tax return will receive the rebate. Dependents age 17 and over will not receive rebate checks nor will the taxpayer who claims them receive any additional monies.
Rebates will phase out for higher income taxpayers. Single taxpayers with $75,000 or more of adjusted gross income and married taxpayers with $150,000 or more will receive smaller rebates. Single taxpayers with $87,000 or more of adjusted gross income and married taxpayers with $174,000 or more will not receive rebates. 2007 tax returns filed for a deceased taxpayer will receive a rebate provided the income level qualifies.
Undocumented aliens and nonresident aliens will not receive rebates.
The federal government plans to distribute rebates beginning in May. If a taxpayer requested direct deposit of their 2007 refund, the rebate will be deposited to the same bank account. All others will receive a paper check in their mail box. If you have changed your mailing address since filing your 2007 return, you should send in a “Change of Address” IRS form 8822. You can get it from the IRS website and use the “More Forms and Publications” link.
If the direct deposit bank account is closed, the rebate check will be delayed in getting to the taxpayer, but will eventually come in the mail.
Taxpayers who have a federal tax or other government debt may not receive any rebate as the money will go towards the debt. Taxpayers who do not file their 2007 return by April 15 will not receive a rebate until after they file. Rebates will not be distributed after 31 December 2008. If a taxpayer files a 2007 return in 2009, provisions will be made for the taxpayer to receive some benefit.
The same legislation also authorized some tax incentives for businesses including enhanced expensing for business property purchased and placed in service beginning in 2008, and provides temporary bonus depreciation for qualifying property.
Fraud Alert!!! “After the last annual calculation of your fiscal activity we have determined that you are eligible to receive a tax refund of...” They all start off the same. Fraudulent emails from unscrupulous rip-off artists proudly proclaiming a tax refund is waiting for you. All you have to do is “click here”. We recently received three such emails at our office – all on the same day -- and are receiving at least one a week! DO NOT, under any circumstances respond. The proper action is to forward the email to phishing@irs.gov. The IRS NEVER communicates with taxpayers by email.
Also, you should be suspicious if you receive a phone call from someone identifying him or herself as an IRS employee, especially if the person asks you for a bank account number or other personal information. The IRS does not call taxpayers to request sensitive information over the phone. The same applies to the Oregon Department of Revenue.
Late Brokerage Statements Are you wondering why your 1099 from your investment account arrived so late? Many security firms received extra time to prepare and send out the 1099 statements, minimizing the need to send corrected statements. This will probably become standard operating procedure in future years given the complexity of their reporting process.
Oregon Energy Credits Oregon still offers tax credits for the purchase of some clothes washers, dishwashers and refrigerators; hybrid cars and certain heating, a/c, solar and water heating systems. To qualify for the credit, you must submit an application along with proof of purchase. Refer to the Oregon Department of Energy website for more information -- and use the “Tax Credits” link.
Non-cash Donation Reminder The IRS requires taxpayers to make and keep an itemized list of non-cash donations that are taken as itemized deductions. Keep a notebook pad with you as you clean out your closets and cupboards. Take digital photos for more documentation.
Tuesday, April 15 -- Tax Day; if you owe taxes on your 2007 income, the money must be paid on this day. City of Portland Business License and Tri-Met tax due. 1st Quarter 2008 Federal and State personal tax estimates are also due.
Wednesday, April 30 – 1st Quarter Payroll taxes due.
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