We're not about to say no to a tax credit.
But, failing to fill out the new Schedule M form when you file could effectively do just that. Treating Schedule M improperly could delay your refund or even cost you $400 if you’re single (twice that if you’re married).
That said, many taxpayers and even some tax preparation software aren’t getting it right. Even though today is Tax Day, it's not too late to back up and make sure you did everything correctly. The economic stimulus package includes a $400 tax credit for singles and $800 for couples. Unless you earned more than $95,000 in 2009 (or you and your spouse earned more than $180,000) you’re entitled to at least some of this money. In fact, you’ve probably already gotten it, in the form of lower withholding and a slightly larger paycheck all year.
The credit is called “Making Work Pay,” but it should really be called “Making Paperwork Pay”—because if you don’t submit a correctly filled-out Schedule M, you could wind up waiting longer for a refund, or paying the IRS money you don’t really owe.
Follow these 4 tips to make sure you get the credit you’re entitled to:
1. Get The Right Form.
2. Double Check Your Software.
Your tax software should automatically generate a Schedule M form. If it doesn’t, contact the software company or look on its website for a workaround.
3. Don’t Forget To Include The Credit On Your 1040.
The tax credit goes on line 63 of Form 1040, and line 40 of Form 1040A.
4. If You Already Filed And Forgot Schedule M, Don’t Panic!
You’re far from alone. In fact, so many people have screwed up on this part of their taxes that the IRS is actually asking them not to file an amended return. Believe it or not, the IRS is itself correcting the error for many taxpayers. That's nice of them, but it's also leading to delayed refunds for people who messed up. If the IRS doesn’t fix your tax return for you, you should receive a notice alerting you to the missing form.