Getting the Recovery Rebate Right

How to Get the Recovery Rebate Credit Right

The IRS sent taxpayers nearly 119 million stimulus payments last year. There are three ways individuals can find out how much they received:

1. Check the amount listed on Notice 1378, which the IRS mailed last year to individuals who received the economic stimulus payment.

2. Go to the How Much Was My Stimulus Payment? tool that is available on the IRS Web site, IRS.gov. This can provide the correct amount in a matter of a few seconds.

3. Individuals can call the IRS at 1-866-234-2942. After a brief recorded announcement they can select option one to find out the amount of their economic stimulus payment. They will need to provide their filing status, Social Security Number and number of exemptions.

With the amount of last year’s economic stimulus payment in hand, the taxpayer can then enter the figure on the recovery rebate credit worksheet or in the appropriate location when your Tax preparaer requests it.

If the taxpayer or preparer is using tax software, the amount of the recovery rebate credit will automatically be calculated and reported properly. If the taxpayer is using the paper method, the recovery rebate credit, as determined through the worksheet, should be reported on Line 70 of Form 1040, Line 42 of Form 1040A or Line 9 of Form 1040EZ.

If there is any question at all as to the amount that should be reported for the recovery rebate credit, the taxpayer or preparer should enter "RRC" next to the appropriate line above, and the IRS will determine whether a recovery rebate credit is due, and, if so, how much.

Some of the major factors that could qualify you for the recovery rebate credit include:

Your financial situation changed dramatically from 2007 to 2008.
You did not file a 2007 tax return.
Your family gained an additional qualifying child in 2008.
You were claimed as a dependent on someone else’s return in 2007 but cannot be claimed as dependent by someone else in 2008.

New S-Corporation Franchise Tax Minimum Tax Payments

This is new for Tax Year 2008.

New York S corporations taxable under Article 9-A are required to pay
the fixed dollar minimum tax.

Fixed dollar minimum tax for all New York S corporations.
Not more than $100,000 $ 25 *
More than $100,000 but not over $250,000 $ 50 *
More than $250,000 but not over $500,000 $ 175 *
More than $500,000 but not over $1,000,000 $ 300
More than $1,000,000 but not over $5,000,000 $ 1,000
More than $5,000,000 but not over $25,000,000 $ 3,000
Over $25,000,000 $ 4,500

Schedule A- Either State & Local Income Tax or Sales Tax but not both

Another Tax tip from your Staten Island CPA

If you file a Form 1040, and itemize deductions on Schedule A, you have the option of claiming either state and local income taxes or state and local sales taxes. (You can’t claim both.) If you saved your receipts throughout the year, you can add up the total amount of sales taxes you actually paid and claim that amount. This is especially helpful if you live in a state with no income tax or you live in a state with income tax, like New York, but purchased a large item (like a car, truck, boat, or appliances). Many smaller taxpayers forget this rule and forget to take the higher amount on their schedule A.

Retirement Contribution Due Dates

Here are some quick Retirement Contribution tips for 2009. These are federal tips and are not New York State specific.

1. Fund your retirement accounts. The deadline for this would be April 15th, 2009 for a 2008 tax year contribution to your retirement account (Traditional IRA or Roth IRA). However, if you have a Keogh or SEP and you get a personal filing extension to October 15, 2009, you can wait until then to put 2008 money into those retirement accounts.