Interesting Facts about the 2008 Economic Stimulus Package
On one hand, you really have to give kudo's to the government. The economic stimulus package has been put together very quickly (for government work). Of course the old saying is good, fast, and cheap… pick any two. In their haste to get money into the economy as soon as possible some unforeseen circumstances have resulted. Here are a few:
Requirement to File: The IRS is using 2007 tax returns to determine eligibility and the amount of payment. High income earners are not eligible, but what about taxpayers with low (or no) income? Unless they file a 2007 tax return, they will not get a payment. This creates a group of citizens who are not required to file a tax return must file so they will not be over looked. One accountant I know is in a quandary. He would like to help out, but this is his busy time of year. "What am I supposed to do?" he asked. "Charge a senior citizen who lives on social security $25 to file a basic return so they become eligible to get $300?" Fortunately there are some resources for help. Low and moderate income workers, including veterans, can get free tax help through the Volunteer Income Tax Assistance (VITA) program by calling 800-906-9887 to find the nearest VITA site. The IRS sponsored Tax Counseling for the Elderly (TCE) program provides free tax help to people age 60 and older. As part of the TCE, AARP offers the Tax-Aide counseling program at sites nationwide during the filing season. For more information follow the link or call 888-227-7669.
Older Children: There is a unique problem for an older teen who works enough to file their own taxes. Since they file their own tax return, Mom & Dad will not get a payment on their behalf. But since Mom & Dad are probably claiming the child as a dependent, the child is not eligible for a payment of their own. In other words, the stimulus package just skips them.
When are Payments Made: The stimulus payments will begin in May and will continue through out the late spring and into summer. Be cautious if you file for an extension to for your 2007 tax return. The first extension is automatically granted when requested and can postpone your tax filing date until October 15, 2008 (you must still pay any tax liability by April 15, 2008). Postpone the tax return and you postpone the stimulus check too.
Keep Your Checking Account: The IRS really provides an incentive to have your tax refund direct deposited. You can get a refund in days instead of weeks. If you have a refund direct deposited keep that account open because stimulus payments will be made by direct deposit to the same account. I imagine that if you close your account before the stimulus payment is deposited, you will still get your payment … eventually. But I would not be surprised if there were forms to fill out and a lengthy delay before the payment can be reissued.
I imaging there are other issues too. Anyone else care to add to the list?
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