Taxcut software for 2008 - error?

Double check the worksheet to see if there's someplace for you to enter the amount of the advance payment you received last year (or a link to that data). I've not seen TaxCut, but every other one I've seen has this information on that worksheet.

As Phil said. You automatically get the Refundable $600 unless you already got it, and then if you have taxes this year you get the other $600, unless you already got it.

ed

The stimulus rebate that was given earlier in the year was really an advance refundable rebate of your 2008 taxes, but because congress wanted to get it into the economy quickly, congress based it on your

2007 return which they already had.

Knowing that in some cases people would qualify for more based on 2007 returns than they would when they filed their 2008 tax, congress said anything paid would not have to be paid back.

Because some people did not qualify for the entire rebate based on the

2007 return but they do now based on the actual 2008 return, congress came up with the "Rebate Recovery Credit" which is on the 2008 tax form and the worksheet you are referring to.

If your tax situation, dependents, income, etc. have changed from 2007 to 2008 so that you now qualify for a larger rebate, the "Rebate Recovery Credit" will give it to you and it will be included in your

2008 refund (or a lowering of the amount due).

Although the program will calculate an additional $600 if you don't make an entry when "asked," the IRS will subtract the money from your refund before it releases any funds. Even though the program may not require an entry, as Phil suggested, there is a place for you to enter the amount already received.

This could be misinterpreted. The maximum credit for a single person is $600. For a joint return it's $1200. Children may add to this. You figure the credit for the 2008 return, subtract the amount of advance payment received, and the balance, if any, is a credit on the 2008 return.

Phil: what I ws saying is that if you don't have $1200 of tax in 2008 you will collect $600 anyway (if MFJ with no children and haven't collected any yet)

ed

I wonder if the IRS will be able to immediately reject an e-filed return for this problem (rebate credit amount on Form 1040 Line 70 too large), or will the return be accepted, setting the taxpayer expectation for a certain amount, and then the lesser amount will be direct-deposited within 8-15 days (if a refund), or a bill for the additional amount due will be sent?

-Mark Bole

I don't see it on the list of reject codes:

4811,00.html typically, the IRS compares taxpayer payments claimed with IRS records, releases an amount that agrees with their records, and sends a letter of explanation to the taxpayer.

Thanx for the hint. Following is the reject code:

0269 Form 1040/1040A/1040EZ - Recovery Rebate Credit (SEQ 1220) cannot be claimed because the maximum amount has already been received based on the information contained on the 2007 tax return.

Now, my next question is, just because a reject code is documented, does that mean it is actually used?

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-Mark Bole

Thanx for the hint. Following is the reject code:

0269 Form 1040/1040A/1040EZ - Recovery Rebate Credit (SEQ 1220) cannot be claimed because the maximum amount has already been received based on the information contained on the 2007 tax return.

Now, my next question is, just because a reject code is documented, does that mean it is actually used?

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-Mark Bole

Just another thought. Did you have twins in 2008?

good question--, I would think so, and I bet we know by Monday!

I don't believe that TaxCut (or any other software) would allow a return to be filed electronically if the taxpayer did not put a figure (even if it's zero) in the field for the amount received. Even though the TP says it calculated a $600 credit, we don't know if the TP passed diagnostics.

Diagnostics has nothing to do with anything.

I've come late to this discussion, but it behooves us to confirm with client whether he did or did not receive a stimulus check last year and if so, for how much. Did you know that IRS even has a handy dandy web site you can check?

ChEAr$, Harlan Lunsford, EA n LA

Haven't seen a second message from the OP, but one must enter a figure on the worksheet for the 600$ "rebate" to be zeroed out.

When I first got my software back in Dec, I was almost happy to see we were getting 1200$ more than I thought, but of course, being the tax pro I am (ahem!) I worked through the worksheet and that solved everything.

ChEAr$, Harlan Lunsford, EA n LA

OP e-mailed me. It was a missed worksheet entry.

? I'd appreciate an explanation of that comment, Harlan.

It is one thing to prepare a return using computer software and print it out. It's another one to be able to e-file that return. My software has two levels of diagnostics, one for the return and one for e-file. I thought that the TP's software would treat an incompleted worksheet as a severe (must-be- fixed) diagnostic.

What I meant was that software diagnostics do just that and have no bearing on whether or not IRS will "diagnose" on its own and reconcile actual receipt or non receipt of the stimulus check.

However I'm pleased to report that my software (Taxwise, which IRS uses) has a provision for either checking a box attesting to the fact no stimulus payment was received or entering an amount on the appropriate line. naturally if an incorrect amount were entered, the software would pass the return through diagnostics, yet the error would not be caught until IRS itself processes the return.

In sort, software diagnostics don't catch all errors.

ChEAr$, Harlan Lunsford, EA n LA

That's one thing I like about TaxWise, although all those "confirming" no entry thingies can eat up time.

I use TaxAct for myself, and it generates a default zero on the worksheet. I've not run it through an e-file diagnostic, but I doubt it would treat it as something to be addressed.

absolutely. The program may have parameters for certain fields, but the computer will believe any number entered within that range. Passing diagnostics means certain hurdles have been cleared, you can still have some real doozies in the return.

At least the stimulus payment is easier to check on than the advance child tax credit of a few year's back: