The Bottom Line
By Susan L. Smith,
Director of Training & Financial Education

Meet Susan L. Smith:

Income tax filing date is one month away. You still have time to review your information to make sure you are applying all eligible deductions.

The biggest news this year is the economic stimulus payment announced by President Bush. According to the Internal Revenue website (www.irs.gov) it is not taxable and will not reduce your 2007 or 2008 refund. Nor will it increase the amount you owe when your file your 2008 return.

To receive the rebate you must file a return. If you are not currently required to file a return, you can use the 1040A short form.

To qualify you must have a valid Social Security Number and have earned at least $3,000.00 income during 2007. Social Security payments, certain veterans' benefits and Railroad Retirement benefits count toward the $3,000.00. Supplemental Security Income (SSI) does not qualify.

MSN columnist Jeff Schnepper says one of the most common mistakes in filing income tax is claiming the wrong marital status. Marital status is determined as of December 31st. Your marital status affects the child tax credit, earned-income credit and exemptions for dependents.

The IRS now requires receipts for cash donations in any amount. You may have noticed a lot of charities are sending acknowledgements of donations received. You are now on their mailing list, but they also want to provide you with a tax receipt.

Be sure to report all income in accordance with IRS requirements. If you have had contract work during the year and the company did not send a 1099 MISC income statement, you should report the income on your return. The employer is required to send you a 1099 but if they fail to do so, it does not change your responsibility to report all income. They may have reported to the IRS and your return will be corrected and taxes and penalties may be charged.

Just a reminder that if you settle a debt, the creditor will report the amount forgiven to the IRS as income to you. You will receive a 1099-C and be required to report the amount when you file your taxes.

Just a few words about filing for an extension. The extension is only for filing the report. If you owe tax, the payment is still due on April 15. If you don't pay the amount due, interest and penalties will accrue. If possible, pay the estimated amount due.

There are many, many tips and information available on www.irs.gov. Make time to do a little research and you may save some money.

The Bottom Line is to start a savings account with your refund!

Susan L. Smith, Director of Training & Financial Education of Consumer Credit Counseling Service of Greater Dallas. You may email her at TheBottomLine@cccs.net.