Time&Money: IRS "stimulus" payments

The IRS has begun notifying taxpayers that more than 130 million households will start receiving economic stimulus payments in May.

To receive a payment, taxpayers must have a valid Social Security number, $3,000 of income and file a 2007 federal tax return. IRS will take care of the rest. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. Millions who usually are exempt from filing a tax return must do so this year in order to receive a stimulus payment. Phaseout reduction begins at $75,000 for single filers.

More details are available at www.irs.gov.

What should single parents expect? Here are some examples from the IRS:

Head of household with children:
1) Single parent with two children, wages of $4,000, no federal income tax liability before child tax credit.
Individual rebate is $300
Qualifying child credit is $600
TOTAL is $900

2) Single parent with two children, no wages, veterans’ payments of $2,000, social security benefits of $2,000, no federal income tax liability before child tax credit.
Individual rebate is $300
Qualifying child credit is $600
TOTAL is $900

3) Single parent with two children, no wages, no social security benefits, veterans’ payments of $4,000, no federal income tax liability before child tax credit.
Individual rebate is $300
Qualifying child credit is $600
TOTAL is $900

4) Single parent with two children, no wages, no social security benefits, no veterans’ payments, AGI is $20,000, federal income tax liability before child tax credit is $195.
Individual rebate is $300
Qualifying child credit is $600
TOTAL is $900

5) Single parent with two children, AGI is $22,000, federal income tax liability before child tax credit is $395.
Individual rebate is $395
Qualifying child credit is $600
TOTAL is $995

6) Single parent with two children, AGI is $60,000, federal income tax liability before child tax credit exceeds $600.
Individual rebate is $600
Qualifying child credit is $600
TOTAL is $1,200

7) Single parent with two children, AGI is $90,000, federal income tax liability before child tax credit exceeds $600.
Individual rebate is $600
Qualifying child credit is $600
Phaseout reduction is ($750)
TOTAL is $450

Attention early filers: Taxes delayed for millions

If you're among early tax filers, heads up: Millions of us claiming certain credits -- daycare and tuition among them -- must wait until Feb. 11 to send returns as the IRS scrambles to incorporate late tax-code changes from Congress.

Five forms related to the alternative minimum tax, approved in late December by Congress, are affected. They include tax credits for:

--Education
--Child- and dependent-care expenses
--Mortgage interest
--Residential energy use
--First-home purchase in the District of Columbia

The IRS expects up to 4 million taxpayers who typically file early will have to wait. "We regret the inconvenience the delay will mean for millions of early tax filers, especially those expecting a refund," acting IRS Commissioner Linda Stiff said in a statement.

If you're expecting a return, the delay could mean you won't get it until late February or early March.

If you file any of the five forms before Feb. 11, expect the IRS to reject your return and request it to be refiled. But if you need to speed up your return, here's some advice from various experts:

--Those who claim child care expenses may be able to do an end run by filing Form 1040 vs. 1040A. You also may file returns without credits to get partial returns, then file an amended return later.

--Electronic filing will expedite your return.

--Tax software makers should supply updates to forms. Paper forms sent by the IRS, however, will not include the updates. Get updated forms at www.irs.gov or from an IRS office, post office, library or a tax professional.