Savvy Consumer: Deadline next week to file for stimulus check this year

More than 316,000 senior citizens and veterans in Texas, including 18,720 in Tarrant County and 28,800 in Dallas County, have yet to file for their stimulus checks, according to the Internal Revenue Service.

"If you have a grandparent or older neighbor, lend them a helping hand with the computer and help them file," said Clay Sanford, Dallas IRS spokesman. "They may be people who are not used to filing a return or haven’t filed in a long time."

The deadline is Wednesday to file the one-page form 1040A and receive the check this year, Sanford said. People also have the option of filing for the stimulus check with their 2008 tax forms next year.

With stimulus checks ranging from $300 to $600 for eligible individuals, $600 to $1,200 for couples filing jointly, and an extra $300 per dependent child, Texas could lose at least $94.8 million coming into the state if this group does not file.

Nationwide, 4.1 million senior citizens and veterans have not claimed their stimulus checks, Sanford said. In total, the IRS expects to issue 124 million payments by the end of the year.

The stimulus checks should have no effect on eligibility for Medicare, Medicaid or other benefits, and generally won’t be counted as income or require the recipients to file income-tax returns.

To be eligible for the stimulus check, filers must have at least $3,000 in qualifying income from any combination of earned income, nontaxable combat pay and certain Social Security, Veterans Affairs and Railroad Retirement benefits. Qualifying income from Social Security includes retirement, disability and survivor benefits but not Supplemental Security Income.

Last week’s financial-industry bailout law also had numerous changes in the tax law for households.

The 2008 Emergency Economic Stabilization Act contained more than $150 million in separate tax breaks and more than 290 changes to the tax code, according to CCH, a national provider of information services for the accounting, tax and legal professions based in Riverwoods, Ill.

Alternative minimum tax

Among the changes is another one-year patch to the alternative minimum tax. The amount of earned income that is now exempt from the AMT went up to $69,950 for married couples filing jointly and surviving spouses, and $46,200 for single taxpayers and heads of household, according to CCH. Without the increase in exemption amounts, married couples making as little as $45,000 and single taxpayers making $33,750 would have been susceptible to the AMT.

The patch also extends the type of nonrefundable personal credits that taxpayers can use to avoid the AMT. Among these are dependent-care credits and education credits, according to CCH.

Greenbacks to go green

The new tax law also includes two-year extensions on some popular deductions, including the one for state and local sales tax, higher-education tuition, property taxes and teacher classroom expenses.

The law also extends the tax credits for residential energy improvements and provides a generous credit for electric cars, which are expected to appear on the market in a few years.

The residential energy-efficiency improvements credits established in 2005 will be extended through 2016, with two new credits for wind and residential solar projects. But consumers should be aware that the legislation covers purchases made in 2009 and beyond and skips 2008.

The credits, which range from $50 to $300, cover purchases of everything from efficient windows and doors to furnaces, air conditioners and water heaters.

An addition to this tax incentive program includes a credit equal to 30 percent of the cost of qualified solar water-heating and photovoltaic systems for your house. A $2,000 cap on the credit was removed in the 2008 Energy Act; thus, a homeowner installing a $40,000, 5-kilowatt rooftop system would now qualify for up to $12,000 in tax credits. A similar credit of 30 percent for residential wind turbines is capped at $4,000. Both credits are available for purchases in 2008.

The new tax credit for electric cars is $2,500 to $7,500, depending on the vehicle’s battery capacity. It is expected that the Chevrolet Volt, with its 16-volt capacity, will be eligible for the maximum credit.

What it means

The tax changes don’t offer many new credits or deductions but rather allow taxpayers to continue along the same road as recent years, said Lacey Riley, a CPA and tax manager for Hartman, Leito & Bolt in Irving.

"It keeps us in the same place as we were in 2007," she said. "I’m not sure I see a huge difference."

In recent years, many of these tax provisions have been extended in year-end legislation, which has thrown the IRS and tax preparers into a scramble to change and update forms. This year, many taxpayers had to wait until February to file and receive their refund because of changes in the law late last year.

With the passage of the new tax law in September, taxpayers and preparers can now plan more effectively, Riley said.

Taxpayers who use software from two popular tax preparers, TurboTax and H&R Block, will also pay a little less next year. Both companies recently announced that they are eliminating their federal e-file charge on all their products. The fees were typically $15 to $20.