Be Nice to Your Tax Preparer

To all the taxpayers who received Social Security, Railroad Retirement or any other group which was scheduled to receive the $250 per taxpayer stimulus, check your records. I know most of you receive your benefits through direct deposit and you didn't hold a check in your hand so please look at your bank statements for the late spring and see if you received a $250 deposit.

A tax preparer's job is hard enough but this year the Making Work Pay Credit is twice as hard as it should be because of the way the administration of the credit was split between the IRS and SS and the RR board. Last year, the stimulus payment was handled through the IRS for everyone. Since they had the records, they were able to provide us with a way to check how much the client's stimulus payment was. This year working taxpayers will get the credit on their tax return to offset the reduction in their Federal withholding. Most retirees received a payment of $250 by check or direct deposit. Neither of those are a problem in itself. The issue are clients who received the $250 and still work. They don't get both payments. The $400 credit must be reduced by the $250 advance payment. This is calculated on Schedule M and carries to the 1040.

Since the administration of the credit was split between agencies, there is no one database to check if a client did receive the $250. My hope, and shared by many colleagues, was that  Social Security would include the info on the SSA-1099 sent to all Social Security recipients. Today I saw one for 2009 and it is not on there. Luckily the client doesn't direct deposit and remembers receiving the check. But I know from experience that many won't remember that they received the payment. This was a lesson learned from last year's stimulus payments. So as you prepare to meet with your tax professional, please check your bank records for April and May and see if you received the payment and how much it was for. They will thank you.