I just came back from doing our taxes

[spinbaby]

And learned that it's time to pay taxes on that stimulus check we got last year.

:-(

[Warpy]

1. No, it's not

Apparently the IRS is inundated with tax forms that have the check listed as "income," which it is on Quicken's software. A lot of people who listed it as income are going to find their returns corrected and their refunds coming in a little more slowly to account for that.

[Nickster]

2. Exactly right.

[merh]

8. thank you for clearing that up

I resent like hell having to include the state tax refund from last year in my tax calculations, to think that I would have to include the stimulus check would have made me nuts.

[ipfilter]

14. If you included your state withholdings as part of last years

Federal deductions this is normal. I have do this every year.

[merh]

23. no shit

I know it is normal - I resent it

[Incitatus]

3. I don't think so.

I used Turbotax and it said it would not count.

[napi21]

5. I used taxAct and it was NOT included! n/t

[GentryDixon]

29. Same here.

No impact on taxes owed. It was not counted as income.

[slackmaster]

4. You should fire your tax preparer

This is basic stuff.

[bluestateguy]

6. Not true

In most cases, you do not have to pay on it, though I think you have to report it.

I know, it's confusing.

[peace13]

7. Wrong!

Really, you need to go back and get them to explain that you were not taxed on that money!

[pnutbutr]

9. It was like a loan

If you got a $600 check you don't get taxed on the $600 but it will reduce your refund if you are getting one by $600 since it was basically a loan on your refund.

[spinbaby]

12. Maybe that's what it was

All I know is that our tax lady asked if we got one and we're getting less of a refund because of it.

[Statistical]

13. Not true.

The $600 is in addition to any refund you will/would receive.

What confuses some people is if you select that you DID NOT RECEIVE a refund then your refund goes up by $600.

This doesn't mean the $600 was a loan but rather those that didn't receive a check will get NORMAL REFUND + $600 = so the refund goes up by $600.

[pnutbutr]

15. It reduced mine

My refund was reduced by $1500 when I went in and added the stimulus amount me and my family received.

[Statistical]

25. Once again it doesn't reduce your refund.

Lets say your refund was $2000.

If there was no check (no stimulus bill last year) then your refund would be ..... $2000
If you got a check then your refund would be ..... $2000

If you DID NOT get a check then your refund would be $2000 + $1200 = $3200.

So yes your refund is "less" if you already got your check BUT if there was no check whatsoever then your refund would only be $2000.

The amount of your refund when you select "I receive a refund check last year" is EXACTLY what you would have got if there was no check.

[pnutbutr]

26. so.........

did turbotax assume I got a refund check by default when I started entering in information? That's the only way that when the rebate was entered it would reduce the refund amount reported in the software.

[Statistical]

28. Maybe?

Seems stupid to me that TT would have the least likely scenario as default but anything is possible.
Taxcut on the other hand assumes you already got stimulus check and if you did NOT it raises rebate.

If TT works they way you describe it adds to confusion but either way the stimulus check does not reduce your refund.


If you print out your 1040 or 1040A and look over it line by line you will notice nowhere was $600 ($1200 married) taken from your refund.

If you DIDN'T get a refund there is a line #70 on 1040 in which you enter how much you "should" have gotten (using worksheet).
Once again you ONLY enter this if you did NOT get a refund.

If you enter the max (say $1200 for married) it would INCREASE your refund $1200 more than normal.

[Lance_Boyle]

30. turbotax online says *very clearly* that the stim check from last year

is not taxed as income, and that it does not impact the refund you receive this year, if any.

Your refund amount decreased for some other reason, perhaps, but turbotax online is crystal clear about how the stim check *doesn't* impact your refund this year.

[prolesunited]

27. Then you did or your preparer did it wrong

[tandot]

10. If you had a professional doing your taxes, he/she is an idiot. Here is the link to the IRS:

http://www.irs.gov/newsroom/article/0,,id=182003,00.html

Q. Is my stimulus payment taxable?

A. No. You will not owe tax on your payment when you file your 2008 federal income tax return. But you should keep a copy of the IRS letter you receive later this year listing the amount of your payment.

Q. If my stimulus payment is not going to affect my 2008 tax refund or increase the tax I owe next year, why is it I need to retain the letter that lists how much I received?

A. In the event you do not qualify for the full amount on your 2007 return but you do on your 2008 return, you will need to have the letter as a record of the amount you previously received.

Q. Will the payment I receive in 2008 reduce my 2008 refund or increase the amount I owe for 2008?

A. No, the stimulus payment will not reduce your refund or increase the amount you owe when you file your 2008 return.

[Hassin Bin Sober]

17. Idiot might be a little harsh.

Many software applications were programed incorrectly.

That's why I do my own taxes - they plug this stuff in to the same programs I can use.



http://www.msnbc.msn.com/id/29041264/
""The IRS has confirmed that some software packages — the agency would not name them — were initially getting it wrong, but those problems were corrected in later software revisions. The first thing anyone preparing their returns on a computer should do is contact the software provider to make sure he or she has the latest updates.""

[CountAllVotes]

18. Many software applications were programed incorrectly

I agree with you on this. I too used TurboTax and I don't need to file a State return as my income is too low. It had me filing anyway for no reason! :mad:

:kick:

[a la izquierda]

19. Hmmmmm....

Something's not right with Turbotax. They have me owing the state over $600. My husband and I make next to nothing, don't own anything. We didn't file yet, because I am out of the country and I figure I'll hire someone to do the taxes when I get home.

[CountAllVotes]

21. I'll never use TurboTax again

next time around I'll download the three forms I need from the IRS and send those in. My status income wise will be declining anyway this year (2009) due to the fact that what interest I make on what small investments I do have will be much less than 2008.

To hell with TurboTax!

$50.00 for nothing!

:kick:

[CountAllVotes]

11. from irs.gov

Stimulus Payments Not Taxable; Reports of Extensive Refund Delays False

The IRS has received a number of recurring questions involving stimulus payments and the recovery rebate credit. Here are some important tips to keep in mind:

Taxability. The economic stimulus payment is not taxable and it should not be reported as income on the 2008 Form 1040, 1040A or 1040EZ.

http://www.irs.gov/newsroom/article/0,,id=203191,00.html

I'm with the others here. I'd fire that accountant/bookkeeper/whatever he/she is!

:dem:

[hobbit709]

16. I used Tax Act and it didn't do that

In fact we thought we might owe this time because my wife got $7600 in unemployment money where nothing was taken out. But taking advantage of a couple of new items on the form we're getting $2400 back out of $3200 paid.

[Hawkeye-X]

20. The IRS didn't even give me the check last year.

It just cut down on our current 'debt' of 2k that we're still paying $75/month to shut them up.

[midnight]

22. They didn't want you deducting your stamps?

[suston96]

24. We hadn't filed a return for 2007 because we had no taxable income....but....

In 2008, we received a letter and a blank 1040A from the IRS telling us to file because we were eligible for the stimulus check which we received some weeks after filing that 1040A.

The IRS sent us another 1040A packet for 2008 tax return. Will do the same this time.