News Room

January 2009

With less than seven weeks until President-elect Obama and a new Congress take office, it�s a good time to examine potential changes in the tax laws.

First of all, it�s unlikely there will be any major changes for tax year 2008. Even with the current lame-duck session of Congress, any substantial revisions of the tax code will wait until President-elect Obama takes office on January 20, 2009. A second economic stimulus package is still possible this year, but it appears that Congress is leaning more toward investments in infrastructure designed to spur economic growth.

There�s still time, however, for your clients to take action based on what is likely to happen next year. Here are a few tips:

Capital Gains: Consider advising your clients to take any capital gains they can before Dec. 31 because an increase in the capital gains tax rate is almost certain next year. The problem, of course, is that few people have many gains available given the precipitous decline of the stock market over the past few months.
Sec. 179 Expensing: Enhanced business expensing up to $250,000 under Sec. 179 expires this year, with 2009 levels set to drop to $133,000. While Obama has proposed extending the $250,000 limit, it is not certain to pass given the cost of other tax changes.
Tax Rates: Consider advising wealthier clients (families making more than $250,000 and individuals making more than $200,000) to accelerate income into 2008 and/or defer deductions until 2009. It appears almost certain that Obama and the Democratic Congress will raise tax rates for higher-income taxpayers
Hiring Credits: Consider deferring new hires until January as Obama has proposed a $3,000 refundable tax credit in 2009 and 2010 for each full-time employee added to the workforce by existing businesses.

Let�s take a look at some of the other changes proposed by Obama during the campaign:

AMT: The huge federal deficit will probably prevent Obama and Congress from repealing the Alternative Minimum Tax completely. More likely are continuing annual �patches,� such as the one already approved for tax year 2008.

Refundable Tax Credits: Obama has proposed several new or expanded refundable credits without providing any specifics. They include:

An expansion of the existing Earned Income Tax Credit to make it available to more taxpayers.
Enhancing and making refundable the current Child and Dependent Care Tax Credit.
Creating a new Healthcare Tax Credit for small businesses.
Creating a new refundable Mortgage Interest Tax Credit.

Estate Taxes: Under current law, the estate tax exclusion is $2 million for 2008 and $3.5 million for 2009 with a maximum tax rate of 45%. The tax would disappear completely in 2010 but return again in 2011 with a $1 million exclusion and a top rate of 55%. Obama proposes to establish the exclusion at $3.5 million for individuals and $7 million for couples with a top rate of 45%. I�ll keep an eye on these and other proposals and keep you posted on changes that will impact your you and your business.

Sincerely, Elizabeth Workman
Custom Tax Services
801-688-4278
Liz@customtaxservices.com
4948 W 5320 S Kearns, UT 84118

July 2008

Another month has gone by and it�s getting closer to the end of the year. Have you ever noticed that as we get older the years go by faster and faster? Can it be that we�re going though a time warp? Or that when we�re 5 a year is 1/5th of our life and when we�re 35 a year is only 1/35th of our life. Jeeze wouldn�t it be nice if other things got shorter as they years went by, such as our waist size and the price of gas.

I thought this month I would give you a break from my wonderful ramblings and send along an interesting article I came across. No it won�t save you millions of dollars, but it can save you some and in these days where it costs you almost a mortgage payment to fill up your car for the month, a few 100 dollars extra in your pocket is always nice.

So take a look at these 16 tips, see which ones you can take advantage of to keep more of your hard earned money in YOUR pocket

16 Ways to Save $100

Simple, sensible ways to save money.

By Susan Berger

From Reader's Digest

As the government and Federal Reserve campaign to head off a recession, many families are working hard to save money and reduce debt. Credit-card debts and other loans hang over us like a sword. By saving modest amounts, however, you can reap big rewards over time. And that doesn't require clipping coupons and washing out used coffee filters. Here are easy ways you can save $100 or more this year:

1. Plug into bargain electricity.
Mickey Greenblatt was spending nearly $250 a month on electricity for his home in Potomac, Md. When the retired executive called his utility company to find out why his bills were so high, the company offered to do a free home-energy audit. Greenblatt learned that simple things such as running his dishwasher at night rather than during the day could cut his bill by 40 percent. Taking advantage of such options as off-peak rates can save most consumers $100 a year.

Savings are also possible under "load management" programs. You get discounts for allowing your utility company to put a device on your water heater and air conditioner that switches them off briefly during periods of high demand.

2. Hit the brakes on automobile-insurance rates.
You can save substantially by increasing the deductibles on the comprehensive and collision portions of your policy. According to the Insurance Information Institute, raising collision deductibles from $200 to $500 could reduce your collision and comprehensive coverage by 15-30 percent. Squeeze out additional savings by asking about every possible discount, such as for carpooling, air bags, annual mileage below 10,000 miles -- even for teenage drivers with grade averages above a B.

3. Challenge your property tax.
Ruth Rejnis, author of Squeeze Your Home for Cash, recommends going to your local assessor's office and finding out what property taxes your neighbors are paying. If your house is similar but your taxes are higher, you may want to challenge your bill. Also, read the description of your home. Errors in square footage or the number of bathrooms could mean an overcharge. The assessor's office or local board of tax review can tell you how to file an appeal.

4. Shop for a bargain bank.
Look for free checking and no ATM fees. Also, if you have direct deposit of your paycheck, your bank might waive its monthly fee.

5. Remedy pricey prescriptions.
Cut your bills in half by buying generic drugs instead of name brands. Also, buy your prescriptions via mail order through a drugstore chain or your company health plan.

6. Pay off your plastic.
If you carry a credit-card balance from month to month, pay it back pronto. A $1000 balance at 18 percent blows nearly $200 a year in interest. If you can't pay it off in full, transfer your debt to a lower-rate card.

7. Say no to car extras.
Your car dealer may sell rustproofing and fabric protection at $100 a pop, and paint protection for as much as $250. "Usually these extras are the dealer's way to squeeze more money out of you," says Bob Elliston, author of What Car Dealers Won't Tell You. Do-it-yourself fabric protector costs about $10 a bottle. Paint protection is unnecessary, since most cars have many layers of paint. And skip rustproofing: cars come already treated so that they won't need it.

8. Take a longer waiting period for disability insurance.
If you can't work, disability insurance pays your living expenses. Many employers offer this. But if you must buy your own, accept the longest waiting period before benefits kick in -- as long as you can cover those expenses, suggests Shelly Branch, author of Dollar Pinching: A Consumer's Guide to Smart Spending. A healthy male carpenter earning $40,000 annually could pay up to $1800 a year for a policy with a 30-day wait. With a 90-day wait it could cost $800 to $1100.

9. Cancel mortgage insurance.
When you buy a house with less than 20 percent down, your lender may insist you buy private mortgage insurance (PMI) to protect against default. The average cost of this insurance is $45 a month, or $540 a year. However, once you have 20-percent equity (either because you've paid down your mortgage or because area property values have risen), you may be allowed to cancel the PMI.

10. Explore DRIPs.
If you buy stock, you can save on brokerage commissions by enrolling in a dividend reinvestment plan (DRIP). Offered by more than 900 companies, DRIPs allow shareholders to buy stock directly. You may have to be a shareholder of record, however, so find out if you'll need to use a broker to buy your first few shares. Then enroll in the DRIP.

11. Buy straight from the Treasury.
Another way to bypass brokers and save money on fees is to buy Treasury notes, bills or bonds directly. The minimum investment is $1000 for bonds and for notes with maturities between five and ten years, $5000 for notes with shorter maturities and $10,000 for bills. Ask the nearest branch of the Federal Reserve Bank for an application for a Treasury Direct account.

12. Clean out your closet.
When you deduct charitable donations of clothing at tax time, do you just guess $100? William Lewis, author of Cash for Your Used Clothing, says most people underestimate the worth of such items.

Before you donate, price each item against similar ones sold at the store where you drop them off. If you're in a 28-percent tax bracket, a donation worth $400 will earn you a tax deduction of at least $112.

13. Skip the service contract
Extended warranties on electronics are rarely a good deal. According to Tom Garman, a Virginia Tech professor of consumer affairs, most product breakdowns occur in the first year and are covered by the manufacturer's warranty.

14. Flex your company's flexible spending account
These accounts allow you to set aside part of your pretax salary for dependent-care costs and unreimbursed medical expenses. You decide at the beginning of the year how much money you want to set aside in the account. The downside is that if you don't use all the money, you lose it. However, if you're in the 28-percent tax bracket and allocate $500 to cover your health-insurance deductible, you'll cut taxes by $140.

15. Buy in bulk.
Items you may use a lot, such as paper towels and diapers, are often far cheaper when you buy in quantity. For example, Alan and Denise Fields, co-authors of Baby Bargains, say new parents buy an average of 2400 disposable diapers in their baby's first year alone. Diapers that cost 20 cents apiece in the packages sold at grocery shops and drugstores might go for 15 cents when bought in bulk at a discount store or warehouse club. Just a nickel a diaper could add up to an annual savings of $120.

16. Rethink your vacations.
"Homestay" programs offer free lodging all over the world to travelers who are themselves willing to host other members in their homes. Some groups charge an annual membership fee, but your savings can easily be worth more than a hundred dollars a day.

This free publication is provided to you as a service of Custom Tax Services and Elizabeth Workman. I invite you to share this letter with others you feel might benefit from the information. If you would rather be more subtle, send me your associate�s name and e-mail address, and they will receive a personalized edition.

Please contact me, or send me an e-mail if you have any questions on this information. Please also provide me with your email so I can send this information to you easier. Please check out my website www.customtaxservices .com for more information on tax info.

Best wishes, Elizabeth Workman
Custom Tax Services
801-688-4278
Liz@customtaxservices.com
4948 W 5320 S Kearns, UT 84118

June 2008

You Asked for It!

Once in awhile technology catches up with us and slaps us in the back of the head. I�ve been there. I know you will all be disappointed, but I really don�t sit down and type each one of you a personal newsletter. I would like to, but the lack of time and a twelve figure balance in my bank account prevent that. So I must type up one letter and then send it one at a time to each of the recipients. I have email address for a few of you which saves me so much time and energy and if I had email addresses for everyone I could actually get these out to you on a monthly basis as I would like to. So PLEASE send me your email address!!!!

In last letters I asked for some of you to let me know what accounting, tax subjects or questions you would like to read about. Some of you have responded and many have not. If you would EVER like to know anything about any tax subject please send me an email (you can always submit it on my website www.customtaxservices.com)

The result of the well intended guilt trip was, however, that some of you expressed some ideas for topics for the next few newsletters. That�s a good thing. So, I will attempt to address those subjects herein, in no particular order.

Enjoy your daily commute!

Don�t you love traffic? All of those vehicles, some of them fifteen feet high, being driven bypeople who are at least as insane as you are. Their minds are on their current cell phone conversation, or last night�s game, or the guy who just cut them off. Perhaps it would be safer for you to work at home! Even better, in addition to avoiding serious damage to your vehicle and your sanity, there are tax advantages to working from a home office. You all remember the criteria for a tax deduction � reasonable and necessary. When you have an office in your home, you can deduct the additional phone lines for business calls and a fax machine. Your can deduct your Internet access as well as cell phone charges. Write off your computer, provided you can establish that it�s used only for business. Here are some bullet points.

You must use your home office regularly and exclusively for your business.
Your home office must be your principal place of business.
The area where you work should be a separate room in your home, if possible.
Exclusive use means that your children cannot use your office computer to do research for school, or to play computer games. Neither can you.
You must:
You can deduct indirect expenses such as mortgage interest, insurance, utilities, and depreciation, unless you already have a loss from your regular business operations.
Improvements you make to the home for your office space are deductible. That includes remodeling your office, adding an outside entrance, and electrical wiring for your computer system. It does not include the Jacuzzi you sit in during conference calls or the plasma television you install to watch the stock ticker.
To calculate the deduction, divide your office's square footage by your home's total square footage to obtain the percentage of your home that you use for business purposes. You then apply the resulting percentage to your indirect expenses to determine your deductible home office expenses.
Keep receipts for all of your expenses for your home, your home office, and your business.
Your records should also include notes about:
You may deduct the appropriate percentage of:
Direct Expenses would include:

Accounting for your investments in real estate

When you�re sitting there in front of QuickBooks on your computer, you enter the checks you�ve written as expenses and the deposits as revenue. Once in awhile, though, you have a transaction that�s not a simple expense or revenue. You�ve read before (if not here, somewhere) that the purchase of something that you will benefit from for more than one year is �capitalized

and depreciated.� That means you record it as an asset rather than an expense, and write off the asset over its useful life. I know what you�re thinking � you can capitalize and depreciate your children and take a tax deduction. No, you can�t.

What if you purchase a rental property? Say it�s one of those little fixer-upper houses that you�re going to fix up and rent for some extra cash flow. That will make you a landlady. Okay, perhaps a landgentleman, if you aren�t normally a lady. You might think you can be a landlord, but you have to be a British citizen to earn the title of �lord.� As usual, I digress. That home consists of several different assets. Hopefully, there is a structure that you will call a house. You will depreciate it over twenty-seven and one half years. Why? That�s the number of years your friends at the IRS tell you is the useful life of residential rental property. How about the land? That expanse of earth that is covered with grass, trees, shrubs, dirt, concrete or weeds. It�s valuable, but is not depreciable. That�s because it doesn�t wear out. Okay, so the lawn needs cutting, and the weeds need to be removed, and the landscaping is atrocious, but it still appreciates, so you can�t depreciate it. Then there are the appliances in the house. The refrigerator, stove, dishwasher, washing machine, dryer, Jacuzzi and furnace all have a useful life shorter than the house itself. It�s probably a good idea to depreciate them separately. Don�t get too detailed, or you will end up recording each bathroom faucet and each door in the house. That would be ridiculous. I won�t go into how to allocate the purchase price of the property into

all of the various parts, because there are too many factors to consider. However, a standard for a single family home is to allocate 20% of the value of the property to land. Now to record the purchase in your accounting records. Here�s an example:

General Ledger Account Debit Credit Details

Rental home X The price of the property less appliances and land.
Appliances X Group all appliances here, but have a separate depreciation schedule to keep the detail.
Land X 20% of the total, unless there is more land than a �normal� residence would have.
Mortgage X The amount you owe the mortgage company.
Cash X Cash you paid at closing.

Okay, what if the property did have extra land, and now you�re selling part of the land? What if there�s a second mortgage? You�re just in trouble, and it�s time to hire an accountant. But, if you want to fumble through it yourself, here�s an entry:

General Ledger Account Debit Credit Details

First mortgage X The amount your first mortgage is reduced by this transaction.
Second mortgage X The amount your second mortgage is reduced by this transaction.
Cash X The tidbit you get to deposit in the bank.
Interest expense X Any mortgage interest paid at closing.
Land X The COST of the land being sold. You�re going to need some calculations here.
Gain on sale of land X The increase in value of the land since you purchased it. Essentially, it�s the difference between the selling price of the parcel and an equitable cost allocation to that parcel.

Now you know all of this, go out and buy yourself some rental property! You have my number.

I don�t know everything.

You knew that. But, my obsession with helping people can�t be quenched unless I can find some solution to your problem. If you have some knowledge that you think would be helpful to the illustrious recipients of this newsletter, go ahead and prepare something and send it to me. I want this newsletter to consist of free information, so I won�t publish plain advertising. You will need to resort to subtle hints. I also do not share my contact list. I will, however, give others the opportunity to be a resource and an educator. We should all benefit from our natural resources.

I also want to be able to provide you with resources. Do you need a landscaper, Loan officer, Realtor, Mary Kay, Avon, Scentsy, Tupperware, Pampered Chef, Handy man, Energy drinks, vitamins, supplements, water purifiers, printing, logowear, web design, massages, coaching, dance instruction, pest control, vacations, investments, or insurance � health, car, life, etc�,

If you have anyone that provides these services please send me their info as well as your testimonial of their services.

Here�s hoping you find a way to make accounting and taxes interesting enough to think about once in awhile. Or, let someone else thing about it. Subtle enough?

Best wishes, Elizabeth Workman
Custom Tax Services
801-688-4278
Liz@customtaxservices.com
4948 W 5320 S Kearns, UT 84118

April 2008

Once upon a time there were three taxes � Income tax, Property tax and Thumb tax. Income tax had the nicest home. He would invite Property and Thumb over for dinner every month. Except for April, of course, when he was very busy. Property tax liked to hang out with people who had many possessions, because those were her best customers. If people were so poor that they didn�t even own a clock, Property wouldn�t even give them the time of day. Thumb tax was pretty bored. Nearly everyone had two thumbs, so they were all taxed the same. Even though Thumb tax was probably the most fair, people didn�t like to sit on Thumb tax. So, he got a part time job holding papers to the wall. Income and Prope1rty felt sorry for Thumb, stuck to the wall all the time, so they decided to pay him to spy on their customers. Inconspicuously hanging on the wall, Thumb tax would watch for taxpayers who tried to hide their income or their property and report them to Income tax and Property tax. Conspiring to assess everyone additional taxes, they all became very wealthy. So, next time you see Thumb tax lying around on the floor, or stuck to the wall without holding any paper, carefully arrest them and put them in a dark drawer.

Yes, it is the time of year for taxes. And we all know that there is nothing more certain than death and taxes at least death doesn�t happen to you every single year!

Yes it is getting to the end of the tax season and what is the most common question asked this year? Well my husband kept asking me if the tax return would be big enough to buy the new fishing boat that he wants and if he could actually use the entire return to buy his fishing boat. I of course said almost and NO! Ok so now that we know that this year we wont be getting the new fishing boat this year. What is the next most asked question? Do we get an additional rebate? And if so how much and when?

The IRS Will Send Stimulus Payments Automatically Starting in May; Eligible Taxpayers Must File a 2007 Tax Return to Receive the Rebate.

Starting in May, the Treasury will begin sending economic stimulus payments to more than 130 million households. To receive a payment, taxpayers must have a valid Social Security number, $3,000 of income and file a 2007 federal tax return. IRS will take care of the rest. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. Millions of retirees, disabled veterans and low-wage workers who usually are exempt from filing a tax return must do so this year in order to receive a stimulus payment. So as you can see those who do not usually file a tax return must do so this year in order to be able to receive this special rebate. So tell all of those that you know to contact their local account (preferably me of course)

Here are some frequently asked questions and the answers to them:

Basic Eligibility

Q. What do I need to do to get an economic stimulus payment?

A. All you need to do is file a federal income tax return for 2007. Even if you are not otherwise required to file a tax return, you must file a 2007 return in order to receive a payment this year. Although some filers, such as high-income filers, will not qualify for a stimulus payment, most will.

In most cases, you will fill out your return, reporting all your income, deductions and credits as you normally would. But even if you are not required to file, you must file a 2007 return to get a stimulus payment this year. Low-income workers, Social Security beneficiaries, certain railroad retirees and those who receive certain benefits from the Department of Veterans Affairs who normally don�t file may receive a stimulus payment if they do. The IRS will provide special filing instructions for those who do not otherwise have a filing requirement. If you qualify, the IRS will automatically figure the rebate and send it to you. The IRS will also send you a notice showing the amount of your payment. You do not need to call the IRS or fill out any other special forms.

Q. How do I find out if I am eligible?

A. The easiest way to find out is to contact your tax accountant. Most people with a 2007 net income tax liability will qualify. This includes most people who get tax refunds. Net income tax liability is the amount shown on Form 1040, Line 57 plus the amount on Line 52. For 1040A filers, it is the amount on Line 35 plus the amount on Line 32. For Form 1040EZ filers, it is the amount on Line 10.

Families with children under 17 generally will qualify for an additional payment. Some people with no tax liability also will qualify. This includes Social Security and Railroad Retirement beneficiaries, recipients of certain veterans� payments, low-income workers with earned income and/or benefits of at least $3,000 and individuals who have combined income of at least $3,000 from any combination of these sources.

Some higher-income taxpayers will not receive a stimulus payment or will receive a reduced payment.

Q: I normally don't need to file a tax return. How do I know if I'm one of those people who may be eligible to receive an economic stimulus payment?

A: This group includes some recipients of Social Security, Railroad Retirement or veterans' benefits as well as taxpayers who do not make enough money to normally have to file a 2007 tax return. For example, this can include low-income workers, those who receive Social Security benefits or veterans� disability compensation, pension or survivors� benefits from the Department of Veterans Affairs in 2007. These people will be eligible to receive a payment of $300 ($600 on a joint return) if they had at least $3,000 of qualifying income. Qualifying income includes Social Security benefits, certain Railroad Retirement benefits, certain veterans� benefits and earned income, such as income from wages, salaries, tips and self-employment. For people filing joint tax returns, only a total of $3,000 of qualifying income from both spouses is required to be eligible for a payment.

Q. If I'm filing a tax return this year just to get a stimulus payment, by when do I have to file?

A. The IRS encourages everyone to file by the normal April 15 tax deadline: The sooner you file the sooner you can receive your stimulus payment. But if you have obtained a valid six-month extension to file or if you are filing to establish your eligibility for the stimulus payment, filing by Oct. 15 means the IRS can process your return and issue a stimulus payment before the end of the year.

Q. I want to estimate my payment. Please explain how it is figured.

A. Essentially, there are two parts to the stimulus payment: a basic amount based on tax liability, filing status or other qualifying factors if there is no tax liability and an additional amount based on whether a qualifying child is reported on the return.

Basic Amount of Payment: Taxpayers who had a net income tax liability will receive a payment, unless they can be claimed as dependents on someone else�s return, are high-income individuals or do not have a valid Social Security Number. The payment is equal to the taxpayer�s net income tax liability, but no more than $600 for a single person or $1,200 for a married couple filing a joint return. The minimum payment is $300 for a single person or $600 for a married couple filing jointly.

People with no net income tax liability will usually get a minimum payment of $300 for a single person or $600 for a married couple filing jointly, as long as they have qualifying income of at least $3,000. To figure your qualifying income, add together the following amounts:

Wages that are reported on Form W-2.
Net self-employment income.
Social Security benefits reported in box 5 of the 2007 Form 1099-SSA, which would have been received in January 2008. People who do not have a Form 1099-SSA may estimate their annual Social Security benefit by taking their monthly benefit and multiplying it by the number of months during the year they received the benefit.
Certain Railroad Retirement benefits reported in box 5 of the 2007 Form 1099-RRB, which recipients would have received in January 2008.
Veterans� benefits received in 2007, including veterans� disability compensation and pension or survivors� benefits received from the Department of Veterans Affairs. People who weren�t required to file a tax return can estimate their annual veterans� benefits by taking their monthly benefit and multiplying it by the number of months during the year they received the benefit.
Nontaxable combat pay if the taxpayer elects to include it as earned income.

Extra Money for Qualifying Child: Eligible taxpayers who qualify for a payment may receive an additional $300 for each qualifying child. To qualify a child must be under age 17.

Phase Out: The stimulus payment �� both the basic component and the additional funds for qualifying children �� begins to phase out for individuals with adjusted gross incomes (AGI) over $75,000 and married couples who file a joint return with AGI over $150,000. The combined payment is reduced by 5 percent of the income above the AGI thresholds.

Here are two examples of how the phase out works:

An individual with AGI of $80,000 and federal income tax liability in excess of $600 would qualify for a basic rebate of $600. Because this individual�s AGI exceeds $75,000, however, her rebate is reduced by $250 (the credit is reduced by multiplying the amount of AGI over $75,000 by 5%). The taxpayer receives an economic stimulus payment of $350.
A married couple with two children, AGI of $160,000 and federal income tax liability before the child tax credit exceeding $1,200 qualifies for a basic rebate of $1,200 and an additional qualifying child credit of $600 for a total rebate of $1,800. But because the couple�s AGI exceeds $150,000, their rebate is reduced by $500 (the amount of AGI over $150,000 multiplied by 5%). The couple receives an economic stimulus payment of $1,300.

Q. My child just turned 17 in December 2007. Do I still get the extra child payment?

A. Not in this case. Eligible taxpayers who qualify for a payment may receive an additional $300 for each qualifying child. But to qualify, a child must be under age 17 as of Dec. 31, 2007. In other words, if a child was 16 or younger at the end of 2007 and meets the other eligibility requirements, then the child will qualify for the $300 stimulus payment.

Q. Will receiving an economic stimulus payment in any way affect my eligibility for other federal benefits, such as temporary assistance for needy families, food stamps or Social Security? Will it count as income for purposes of my Social Security benefits?

A: No. The stimulus payments will not have any effect on eligibility for federal benefits

Q: I know some people won�t get a stimulus payment. How do I know if I�m one of them?

A: You won�t get a stimulus payment in 2008, if any of the following apply to you:

You don�t file a 2007 tax return.
Your net income tax liability is zero and your qualifying income is less than $3,000. To determine your qualifying income, add together your wages, net self-employment income, nontaxable combat pay, Social Security benefits, certain Railroad Retirement benefits and certain veterans� payments.
You can be claimed as a dependent on someone else�s return. For example, this would include a child or student who can be claimed on a parent�s return.
You do not have a valid Social Security Number.
You are a nonresident alien.
You file Form 1040NR or Form 1040NR-EZ, Form 1040PR or Form 1040SS for 2007

Taxpayer Identification Numbers

Q. I file using an individual taxpayer identification number (ITIN). Can I still get a stimulus payment?

A: No. The law does not allow stimulus payments to people who file a return using an ITIN. A taxpayer must have a valid Social Security Number to qualify for the stimulus payment. If married filing jointly, both taxpayers must have a valid Social Security Number. And children must have valid Social Security Numbers to be eligible as qualifying children.

Q. I have an ITIN, but my spouse has a valid Social Security number. Can we get a payment?

A. If you and your spouse file a joint return, you will not get a stimulus payment. If your spouse files a separate return, your spouse may qualify for a payment, based on his or her income deductions and credits.

Q. If I have a valid Social Security Number and my child has an ITIN, do I get extra money for the child?

A. No. To qualify for the extra credit for qualifying children, not only do the taxpayer and spouse, if filing jointly, need valid Social Security Numbers, but the qualifying child must also have a valid Social Security Number.

When & How?

Q. When will I receive my stimulus payment?

A. The Treasury Department will make payments starting in early May. Early filers, especially those who choose direct deposit, will get their payments first.

If the IRS finishes processing your return by April 15, you will most likely get your payment based on this schedule. If you choose direct deposit, this means your payment will arrive on May 2, May 9 or May 16. If you do not choose direct deposit, checks will be mailed between mid-May and mid-July. For this initial batch of stimulus payments, the payment date will be based on the last two digits of your Social Security Number.

Q. Will my stimulus payment be included in my regular tax refund? Will the checks or direct deposits come at the same time?

A. No and no. There will be two payments. You will receive one payment for your regular tax refund and later you will receive a separate stimulus payment.

Q. I have moved since filing my 2007 tax return. How will my payment reach me?

A. You should file a Form 8822 with the IRS and a change of address notice with the U.S. Postal Service. This will ensure your check is sent to your new address. Without your current address, the check could be returned to the IRS as undeliverable.

Q. Can I have my stimulus payment direct deposited?

A. Stimulus payments will be direct deposited for taxpayers who select that option when filing their 2007 tax returns. Taxpayers who already filed and requested direct deposit won't need to do anything else to receive the stimulus payment. Taxpayers who did not request direct deposit for their 2007 refund will receive a paper check by mail. The IRS reminds taxpayers who haven't filed their 2007 returns yet that direct deposit is the fastest way to get both regular refunds and stimulus payments.

Q. If I'm not expecting a refund, should I still fill out the direct deposit line on my return so I can get my stimulus payment direct deposited?

A. Yes. Even if you aren't due a refund on your tax return, filling out the bank routing information will allow for your stimulus payment to be direct deposited.

Q. If I use direct deposit for my tax return refund and my bank account information later changes, what will happen when my stimulus payment goes out?

A. Typically, the direct deposit will be rejected. After the IRS receives a rejection notice, the payment will be converted to a paper check and mailed to you.

Q. Is there anything I can do to prevent my stimulus payment from being direct deposited if I have already filed a tax return and selected direct deposit?

A. Generally, the answer is no. If you designated direct deposit on a tax return, then the stimulus payment will go to the account number you designated. If the account number is no longer active, the IRS will send you a paper check. If you do not want your stimulus payment to go to the account listed on your tax return, you should contact your financial institution to discuss possible options.

Q. If my direct deposit goes to fund an Individual Retirement Account, what will happen if the deadline for my IRA has passed or the maximum amount has been funded?

A. If you do not want your stimulus payment to go into the account listed on your tax return, you should contact your bank or financial institution to discuss possible options involving the account to either prevent the deposit from occurring or making sure the payment is routed to a non-IRA account.

Q. If I apply my refund to my 2008 taxes, what happens to my stimulus payment?

A. You will still receive a stimulus payment; it will not be applied to your 2008 taxes.

Q. I chose direct debit to pay my tax bill. Will my stimulus payment be direct deposited to the same account?

A. No, the account information used for an incoming Direct Debit payment to the IRS cannot be used as the account information for the Direct Deposit of the stimulus payment. People who choose Direct Debit to pay a balance due will receive their stimulus payments by paper check through the mail.