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Saturday, March 06, 2010

Did You Know About Schedule M?

A friend of mine once said to me that oppression through government taxation occurs two ways: through sheer dollar value (or whatever currency you live under), and through complexity.

The latter manifests itself in different ways. Complexity causes some to fill out their forms wrong and make costly mistakes. Some tax credits require complex steps to claim; the complexity discourages some from going through the hassle. (The student interest loan deduction, for example, takes nine steps to calculate.) Some tax credits are hidden from sight.

Which brings me to Line 63 of the 1040 long form:

Making work pay and government retiree credits. Attach Schedule M

What the heckity heck is that?

The IRS has a webpage devoted to this credit:

In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns.

This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with modified adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.

Any stimulus check you may have gotten last year gets subtracted from the MWP credit.

Schedule M form is here, instructions here.

I have not submitted my 1040 - just did the preliminary math - so I can still claim it.

If you submitted your 1040 without claiming the Line 63 credit, you might try calling the IRS hotline at 800-829-1040 to see if you have any recourse to claim the credit nobody told you about. Can't make any promises, but it's worth a shot.

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