It is important to note that even if you file an extension, your taxes are due April 15th, whether or not your tax forms have been completed and filed. If you filed an automatic tax extension form, it is best to include any estimated taxes owed to avoid penalties and interest (as long as you send the IRS 90% of your actual tax obligation you will not owe late filing or late payment penalties). If you overpay, you will receive a refund.

How do tax extensions work?

Filing for an automatic 6 month extension to file your taxes is easy. Simply fill out Tax Form 4868, Application for Automatic Extension of Time To File U.S. Income Tax Return by the tax filing deadline (usually every April 15). You then have until October 15th to file your taxes with the IRS. If you missed the deadline to file for an extension, get it in ASAP, which will minimize IRS penalties and interest owed. These penalties and fees can be substantial!

After you file your tax extension

Now comes the fun part - get your taxes done. There are many options such as doing them yourself by hand, paying someone to do them for you, or purchasing a software program such as TurboTax or TaxCut. The sooner you get them done the better, because if you owe more in taxes than you paid, you may owe late payment penalties. Having a deadline hanging over your head can also cause a lot of unnecessary stress.

Late filing and late payment penalties

If you didn’t file for an extension and still haven’t completed your taxes, do them ASAP! This will help minimize IRS penalties and interest owed. Remember, if you owed taxes, the money was due to the IRS by April 15th. Even if you can only send in a partial payment, that will help reduce the amount of penalties and interest you owe.

Late filing penalties are high. The IRS will assess a late filing penalty of 5% of the unpaid taxes not paid by the due date for each month your taxes are late, usually to a maximum of 25%. It is very easy for late filing penalties to to reach several hundred or several thousand dollars. If your payment is more than 60 days past due, the minimum late filing penalty is $100 or the balance of the taxes you owe, whichever is less.

Late payment penalties and interest are also assessed when you do not send the IRS your tax obligation by the tax deadline. The late payment penalty is usually 0.5% of your unpaid taxes, with the maximum also at 25%. You may be able to have your late payment penalty waived if you paid over 90% of your obligation, however, you would still owe interest on the balance due. The interest stops accruing when you pay the balance. Translation - pay your taxes ASAP to avoid large penalties and fees!

photo credit: woodsy.

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A reader left a comment in favor of the Obama’s Emergency Economic Stimulus Plan, which calls for $50B to be given to individuals for relief from high energy costs, and another $50B split between the State Growth Fund and the Jobs and Growth Fund (a federal program). The latter two funds will use the $50B to pay for improvements to roads, bridges, and schools. Obama’s plan did not state where the money to pay for the State Growth Fund and the Jobs and Growth Fund would come from.

The $50B earmarked for individuals would equal $500 for single taxpayers, and $1000 for married couples or joint tax filers. It would be paid for over a 5 year period with “windfall taxes” on oil companies.

Would an extra $500-1000 help people? Surely. But I think there are better things that can be done with $50 billion dollars.

The reader comment is in the highlighted section below, and it is followed by my response (Here is the original comment). By no means is this meant to flame the commenter. This is strictly my opinion, and I welcome you to continue the discussion in the comments section.

As I sit here and read all of the folks that disagree with a second stimulus payment, I have but one question. Did any of you that dont seem to need that extra kickback, refuse the check, or donate it to charity? I know I benefited from it greatly. I dont live on public assistance, work my tail off to support 3 kids and the extra cash flow helped me pay some bills. Besides, if the United States can help other countries because thats our motto, why cant help each other? What ever happened to help our fellow man..some of you act like taxing a company thats already well beyond rich is such a bad thing. Why not have them give back to its own?

~ Dot

Hello Dot,

I commend you on your hard work raising your children. I have not been in your shoes, and I cannot pretend to understand what you sacrifice in order to give your children everything they need. That said, I don’t think a second stimulus check is a good idea for the economy. Yes, it would certainly help a lot of individuals, but on the whole, I think it would be detrimental to the long term health of our nation’s economy.

Refusing the stimulus check. I don’t think disagreeing with a first or second stimulus check has anything to do with refusing or donating the first stimulus check. I didn’t like the idea of the first stimulus check, but I accepted the money because at that point the government made a permanent change to the tax laws and it became my money. Just because I don’t agree with a change in a tax law doesn’t mean I should give away my money as a silent protest. That would accomplish nothing.

The emergency stimulus rebate is only designed for temporary assistance. Obama is proposing another permanent change to the tax laws in order to pay for what he calls a “4 month reprieve from high energy costs.” But if you read his stimulus plan you will see he plans to pay for a permanent change to the tax laws over a 5 year period. If it takes 5 years to pay for the first year of the permanent tax break, how will future years be paid for? More taxes will have to be raised to pay for this permanent change to the tax laws.

The problem with these permanent changes to the tax laws is that we are mortgaging our future to pay for a temporary solution. Sure, a couple hundred bucks would help most people, including my wife and I. But at what cost? This basically equates to using credit cards to pay for living the high life. Eventually the bill comes due and someone has to pay. That someone is you and me and our children and possibly their children.

What’s the big deal about levying a windfall tax on large oil companies? Because it taxes not only the oil company, but everyone who holds a share of that oil company, including people who hold shares of those companies in index funds, mutual funds, pension plans, retirement accounts, etc. This would include a lot of state, city, and government pension plans, as well as those belonging to millions of individuals.

On top of that, companies are in business for one reason: to make money. If the government forces additional taxes on oil companies, the oil companies will respond in kind by raising gas, diesel, and oil prices. It may be a few cents per gallon, but that eventually turns into a tax on everyone who drives or consumes anything that requires transportation to get from the point of production to the point of sale - including food, clothing, plastic and rubber goods, and other items.

I am also of the opinion that is it not for the US government to one day decide that a company makes too much money, so it should be redistributed to Americans. How can companies plan to run an effective business when the rules are subject to change at the will of a political party?

Note: The tax situation with the oil companies is extremely complex. There many tax credits, deductions, and other loopholes which allow the oil companies and other corporations to pay fewer taxes. I prefer to support tax reform to close these and other loopholes that affect many individuals and corporations before I would support taxing one or several corporations simply because a politician wants to make an example of them to garner attention and votes.

Can the US help its people and the economy at the same time? Yes, I think they can. But I don’t think handing out checks is the answer. The second part of Obama’s Emergency Economic Stimulus Plan calls for $50B to go to the State Growth Fund and the Jobs and Growth Fund. This would create jobs to repair roads, bridges, and schools, all of which need attention on both state and national levels. I believe creating jobs is a more permanent solution when compared to government handouts.

Unfortunately, I don’t have an answer for how to fund the proposed $50 billion bill. As mentioned earlier, I would much prefer closing corporate and personal tax loopholes and indiscriminately spreading the bill among many people and corporations instead of singling out a one set of companies and making them a political scapegoat.

In my opinion, a second stimulus check is nothing but a temporary solution to a larger problem.

Feel free to add your own comments - for, against, or indifferent.

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Besides people who don’t normally file income taxes, there are others who have not yet received their economic stimulus check.

How to claim your economic stimulus check

Your rebate check should have automatically been sent to the address you used when you filed your taxes. If you haven’t yet received it, try these tips:

Use the official stimulus payment tracker. The first thing to do is try using the official stimulus payment tracker on the IRS web site. Input the information that is on your tax return, and follow the step by step instructions. You should find out where your rebate is.

Direct deposit or paper check? A lot of people who signed up for direct deposit, but used a third party tax preparation company such as TurboTax or TaxCut will receive paper checks because of a compatibility issue with the IRS software. This caused a lot of delays in people receiving their rebate checks. Taxpayers who received their refund on a prepaid debit card from a tax preparation company will receive their rebate by mail. Taxpayers who did not request Direct Deposit for their 2007 refund or provide the IRS their bank information when they paid taxes will also receive a paper check by mail.

Be patient. Keep in mind the stimulus checks can take up to 6 weeks to arrive, so it is possible the check is in route. If more than 6 weeks have passed since you were supposed to receive your rebate, go to the next step.

Contact the IRS. If that doesn’t work, try contacting the IRS at 1-866-234-2942. Again, be patient. IRS workers are receiving hundreds of calls daily, and need time to process your information. You will get much better results if you are friendly with the agent handling your claim.

Other reasons you may not have received your economic stimulus rebate

You moved. The IRS does not allow rebate checks to be forwarded. If you moved between the time you filed your tax return and the time the economic stimulus rebate check, you will need to file a Form 8822 with the IRS, and a change of address notice with the U.S. Postal Service. This will ensure your check is sent to your new address. Keep in mind there may be additional delays while the IRS processes your new information.

Your rebate check was garnished. By early June, the IRS garnished over $840M through the Treasury Offset Program. Since not all checks have been processed yet, that number may be closer to $1B in total garnishments. Your check may be garnished if you owe money for unpaid taxes, student loans, or child support. Taxpayers on a scheduled payment plan are not affected by the Treasury Offset Program. If your money was scheduled to be garnished, you should have received a notice.

You filed your taxes late. The IRS will continue processing stimulus checks through.. of this year. The rebates are based on taxpayers’ 2007 tax returns. Taxpayers who file extensions or file late should receive their checks later than regular filers. The checks will be sent out automatically; taxpayers don’t need to apply. You may receive your rebate as soon as 2 weeks after filing, but it may take up to six weeks to process your rebate check. A return must be filed by October 15 in order to receive a stimulus payment this year.

More information about Stimulus Checks and Missing Money

More information about the Economic Stimulus:

• Economic stimulus rebate frequently asked questions.
• Tips on how to use your economic stimulus check.
• Will there be a second economic stimulus check?
• Is another economic stimulus check a good idea?

More information about unclaimed money: States keep track of unclaimed money with the intent of returning it to it rightful owner. It is free to search the state databases, and free to make a claim if you find money or assets that are rightfully yours. Keep this in mind if anyone ever offers to help you claim money that is yours. Read more about how to find missing money.

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Two part Emergency Economic Stimulus Plan

The first part of the emergency economic stimulus plan is a $50 billion emergency energy rebate which would give permanent tax breaks of $500 to individual workers and $1,000 to families. This could happen as soon as this fall. According to Obama, “This rebate will be enough to offset the increased cost of gas for a working family over the next four months. Or, if you live in a state where it gets very cold in the winter, it will be enough to cover the entire increase in your heating bills. Or you could use the rebate for any of your other bills or even to pay down debt.”

This is the first part of Barrack Obama’s Emergency Economic Plan:

1. Forcing big oil companies to take a reasonable share of their record breaking windfall profits and use it to help struggling families with direct relief worth $500 for an individual and $1,000 for a married couple. The relief would be delivered as quickly as possible to help families cope with the rising price of gasoline, food and other necessities. The rebates would be fully paid for with five years of a windfall profits tax on record oil company profits. This relief would be a down payment on Obama’s long-term plan to provide middle-class families with at least $1000 per year in permanent tax relief.

The second part of the plan calls for a $50 billion stimulus that, according to Obama’s campaign, would save more than a million jobs. The money from this part of the stimulus would be split among state and national government agencies and would go toward rebuilding roads, repairing bridges, and repairing schools.

This is the second part of Barrack Obama’s Emergency Economic Plan.

2. $50 billion in immediate measures to turn our economy around and help prevent more than 1 million Americans from losing their jobs:

• $25 billion in a State Growth Fund to prevent state and local cuts in health, education and housing assistance or counterproductive increases in property taxes, tolls or fees. The fund will also ensure sufficient funding for home heating and weatherization assistance as we move into the fall and winter months.
• $25 billion in a Jobs and Growth Fund to replenish the highway trust fund; prevent cutbacks in road and bridge maintenance and fund new, fast-tracked projects to repair schools – all to save more than 1 million jobs in danger of being cut.

How will the US Government pay for another round of stimulus checks?

By raising taxes. Obama’s plan calls for placing a windfall tax on oil companies to pay for the emergency economic stimulus plan checks sent to taxpayers. Obama’s plan calls for the stimulus checks to be paid for with 5 years of windfall taxes, but he also calls for the individual tax breaks to be permanent.

How will the US Government pay for the combined $50 billion for the State Growth Fund and the Jobs and Growth Fund? There was no answer. Actually, the purpose of the State Growth Fund is to give the states more revenue without forcing the states to raise taxes. Raising national taxes must be a clever way around that.

Something doesn’t add up. The $50 billion emergency economic stimulus plan for individual tax payers will take 5 years to pay off using windfall taxes on oil companies, but the tax breaks are also supposedly permanent tax breaks. The money for the State Growth Fund and the Jobs and Growth Fund is as of yet unaccounted for. The paper didn’t specify if these are to be permanent as well.

Do we really need another round of stimulus checks?

What is the Obama campaign trying to accomplish? Obama’s written policy states that he wants to tax oil companies for 5 years to pay for 4 months of relief for American tax payers. That doesn’t seem like an efficient use of resources to me.

The State Growth Fund and the Jobs and Growth Fund both have more appeal to me. The goal of each of those funds is to create something. Create jobs, create roads, create opportunity. And that is what America is about - opportunity.

If you are going to go for broke, then go for broke while trying to create something. Not while trying to buy votes.

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

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Our check arrived on time

We actually chose to have our check direct deposited, but due to some technical errors between the IRS and several 3rd party tax preparation companies, many people who chose to get direct deposit returns ended up with checks by mail instead. People who elected to get refund anticipation loans will also get a paper check.

According to the IRS schedule below, our stimulus check was supposed to be sent out on June 20th, and we received it on June 23rd. About a week ago we received a notice from the IRS informing us when our check was due to be sent out, how much we were to receive, and what to do if we didn’t receive the check in a reasonable amount of time. The IRS told us to expect up to 6 weeks to receive the check, so I am happy it came so quickly!

When will you get your economic stimulus check?

This is a copy of the official economic stimulus schedule.

Where is your stimulus check?

If you haven’t received your check yet, it’s probably still in the queue. Many people who were supposed to receive direct deposits will end up receiving paper checks, which pushes back the day you should receive your check. You can also expect up to 6 weeks to receive your check, but hopefully it will come sooner. If you still haven’t received your check after 6 weeks, try calling the IRS at 1-866-234-2942. They should be able to help you. Be patient though… I’m sure they are getting a lot of phone calls!

Frequently asked stimulus questions

Have more economic stimulus questions? Check out the economic stimulus FAQ page. It has a lot of great information regarding who is eligible, income eligibility limits, special exceptions and more. Check out this article for how the economic stimulus rebate applies to military members.

I hope your check comes soon if you are getting one!

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Everything you need to know about the economic stimulus payments

On May 1st, the IRS updated their Economic Stimulus Information Center page, which has just about everything you might want to know about the economic stimulus rebates, including:

• When? official stimulus payment schedule,
• How Much? the official stimulus rebate calculator,
• Where is my rebate? and the stimulus payment tracker.

I have highlighted some of the information from those pages for you.

The Official IRS Payment Schedule

This is a copy of the official stimulus payment schedule from the IRS web page, as of May 1, 2008. Economic stimulus payments will be issued according to the last two-digits of the main filer’s Social Security number. For joint filers, the payments will go out based on the person listed first on the return. Payments will be made by either direct deposit or paper check, consistent with how people filed their 2007 tax return.

According to the IRS website, direct deposits will be made daily and will be completed by the date listed below (assuming your tax return was filed by the April 15 deadline):

Direct Deposit

Paper checks will also go out based on Social Security number. For Social Security numbers ending in 00 through 09, the paper checks will be mailed starting May 9 and will continue through May 16. A similar process will be repeated in the following weeks.

Paper Check

Late filers. People who file a return after April 15 will receive their economic stimulus payment, but probably about two weeks later than the schedule shows. A return must be filed by October 15 in order to receive a stimulus payment this year.

The Official IRS Rebate Calculator

The web based stimulus rebate calculator is easy to use and takes about 5-10 minutes to complete. You will need a copy of the Form 1040 that you filed with the IRS. Then, follow the instructions. Don’t worry, the IRS doesn’t ask for any personal data such as your SSN, nor does it store any of your information when you use the calculator. All entries are erased when you exit or start over. Keep in mind, this is only an estimate, and is not “official” until you receive the check.

Where’s My Stimulus Payment? - The Official IRS Rebate Tracker

The IRS created a web based tool to help you track the status of your economic stimulus rebate. You will need to have your tax return handy because you will need to input some key information from your return, including your SSN, filing status, and number of exemptions. The tool will locate your information in the database and give you the status of your rebate.

Important note about rebate tracker: The IRS recommends using the Payment Schedule prior to using the payment tracker since your payment information will not be available on this tool until the time that your payment is scheduled.

More questions about the stimulus package?

For more details or frequently asked questions, read the Economic Stimulus Package Frequently Asked Questions, or visit the IRS Stimulus Payment Information Center.

Most importantly - be patient! The IRS is processing millions of rebates in an extremely short time period. There are bound to be a few speed bumps along the way. Good luck!

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Actually, that is the whole reason for the stimulus to begin with, but I guess they think 4 days will make a huge difference on the economy. It might make a difference for some people, but I’m not so sure it will turn the tide for our economy.

The IRS will be able to distribute the stimulus rebate checks earlier than previously scheduled due to a new computer program they have in place.

According to CNN, “As of next week, 800,000 tax filers daily will begin to have their checks directly deposited Monday, Tuesday and Wednesday. No checks will be distributed Thursday, and 5 million payments will be made Friday.”

The original schedule for the economic stimulus rebate check release:

The rebates will be sent out according to the last to digits of the tax filers Social Security Number (these dates assume you filed your taxes by the April 15th deadline).

If your tax return was filed after the April 15 deadline, your rebate checks may be delayed until approximately two weeks after you receive your refund (if you receive a refund). Since it normally takes the IRS about 2 weeks to process most tax returns, it should take about a month after you file to receive your rebate check.

What is the new rebate schedule?

Logic would dictate that the rest of the dates would be moved up 4-5 days, but the official release has not be announced. Because the IRS has the new computer system in place, it may be possible that they are sent out earlier than anticipated.

For more information, check out the Economic Stimulus Package Frequently Asked Questions.

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As a note, I try to respond to every reader e-mail/comment/question, and repeating answers can take up a lot of time! But I love reader comments and questions, so feel free to hit me up! (but if it is regarding the economic stimulus package, check this FAQ section first!).

Keep in mind, this information is gathered primarily from the IRS web page, and I am not a tax professional. So if you are in need of professional tax advice, please consult the IRS or a tax pro.

What is the economic stimulus package?

The economic stimulus package is a change in the tax code that will eliminate the 10% bracket from 10% to zero for the first $6,000 of taxable income in 2008. But the government decided to do this based on tax filer’s 2007 taxes so they could distribute this money so tax payers would spend it now and (hopefully) boost the economy.

Who is eligible for the rebate?

The economic stimulus rebate check is available to qualifying tax payers, based on IRS calculations. Single tax filers with adjusted gross income (AGI) less than $75,000 and couples filing jointly with AGIs less that $150,000 will qualify for full rebates. Those with AGI levels above the maximum will receive a reduced rebate based on a phase-out schedule.

Persons who do not owe income taxes, but earned at least $3,000 in wages, Social Security benefits, or veterans disability benefits, will get rebate checks of $300 for individuals and $600 for couples.

Who will not receive an economic stimulus check?

You will not receive an economic stimulus rebate in 2008 if:

• Your net income tax liability is zero and your qualifying income is less than $3,000. To determine your qualifying income, add together your wages, net self-employment income, nontaxable combat pay, Social Security benefits, certain Railroad Retirement benefits and certain veterans’ payments.
• You can be claimed as a dependent on someone else’s return.
• You do not have a valid Social Security Number.
• You are a nonresident alien.

Keep in mind, the calculation will be run again in 2009, so if your situation changes, you may be eligible to receive a rebate at that time.

How much will I receive for the rebate?

Qualifying single filers (AGI less than $75,000) will get rebates of up to $600. Qualifying couples (AGI less than $150,000) will get rebates of up to $1,200, plus $300 per dependent child younger than 17, with no maximum number of eligible children. The rebate starts out at $300 per person, but rises to $600 per person to match the taxes you will pay based on your 2007 Adjusted Gross Income (AGI).

Your AGI is generally lower than your salary, and is based on your earnings after tax deductions such as 401(k) and Traditional IRA investments and other qualified deductions. However, if you earn above a set limit, you may receive less than $600. The tax rebate decreases by $50 for every $1,000 earned above $75,000.

I recommend using the official stimulus rebate calculator for a better idea of how much you might receive.

What do I have to do to get my rebate check?

If you file taxes in 2007 and qualify for the rebate, it will be automatically sent to you. To receive the economic stimulus rebate, you are required file a 2007 tax return, either a form 1040, 1040A or 1040-EZ. If you are someone who normally doesn’t file a tax return (for example, a pensioner, retiree, of someone whose income is based on Social Security, military veteran’s disability, or other income), you will need to file a tax return in order to receive the rebate.

Will I receive my rebate check via direct deposit or by mail?

Stimulus Payments will be direct deposited for taxpayers who select that option when filing their 2007 tax returns. Taxpayers who already filed and requested direct deposit won’t need to do anything else to receive the Stimulus Payment. Taxpayers who did not request Direct Deposit for their 2007 refund, or provide their bank information to the IRS if you paid taxes, will receive a paper check by mail.

I received my refund on a prepaid debit card - will my rebate check some the same way?

Those who received their tax refund on a prepaid debit card from a tax preparation company will receive their rebate by mail. They will receive a check sent to the address on their return. Refund anticipation loans for the stimulus check are not allowed by the IRS.

What if I earned more than the maximum income?

If you earned more than the maximum, you may still be eligible for a refund check. However, it will be reduced by 5-percent of the amount you earned above the AGI income cap of $75,000 for a single filer or $150,000 for couples. The rebates will follow this formula until it phases out, and those earning above the phase out level will not receive a rebate check.

For singles, the phase-out level begins at $75,000 and ends at $87,000, with a reduction of $50 for every $1,000 earned over $75,000. If you earn above $87k, you will not receive a rebate.

For couples, the phase-out level begins at $150,000 and ends at $174,000, with a reduction of $50 for every $1,000 earned over $150,000. If you earned above $174k, you will not receive a rebate.

Will I receive the economic rebate if I am someone’s dependent?

If you are over 17 and are a dependent, neither you or your parents will receive a rebate, even if you earned enough money to qualify for the rebate. This will affect many high school and college age workers who worked last year and earned the minimum amount to receive the rebate.

However, keep in mind, the rebate is based on your 2008 income, and the rebate calculation will be run again when your taxes are due in 2009. So if your dependent status changes between now and the time you file taxes next year, you may still receive the rebate in 2009.

When will I get my economic stimulus rebate check?

If you filed your tax return by the April 15th deadline, you will receive your rebate check automatically starting May 2. For those who elected to receive their rebate check via electronic deposit, checks will begin being sent by the IRS on May 2nd. For those who will receive their check via mail, the checks will be sent starting May 16. If you filed your taxes late or filed for an extension, you may not receive your rebate check for several weeks after you file, and there have been some reports that it may take several months to receive your rebate.

Update: The economic stimulus checks will be sent out a week early.

I did not receive the economic stimulus rebate letter in the mail. Will I still get the rebate?

Yes, you will. The letter was only sent out to remind people what was happening and to explain when the rebate checks will be sent. The rebates will be sent automatically, so there is nothing you need to do to receive your check.

What if I moved?

To ensure you receive your rebate, you will need to file a Form 8822 with the IRS and a change of address notice with the U.S. Postal Service. This will ensure your check is sent to your new address. Without your current address, the check could be returned to the IRS as undeliverable. You would still get it, it would just take longer because it would have to go through the IRS system.

How does the rebate affect my taxes in 2009?

There is some misconception about the stimulus package; it is not a loan on your 2009 taxes. You do not pay it back. The IRS eliminated the 10% bracket for the first $6000 of taxable income (AGI). The rebate will not in any way be figured into next year’s return.

If you did not qualify for the rebate based on the taxes you filed in 2008, but your situation changes when you file your taxes in 2009, you may be eligible for the difference if it is in your favor. If the change is not in your favor, you will not have to pay the difference.

I am having wages garnished by the IRS. Will this affect my rebate check?

It may. If it does, the IRS will send you a notification letter explaining where the money went and why. Some examples of this could be past due taxes, student loans, wage garnishments, or child support. If you have further questions, contact the IRS.

Can I use the money from the rebate check for whatever I want?

Yes, you can. Once the money is sent to you, it is yours to do with whatever you want (though if you have legal obligations to take care of, you might want to do that). I ran an economic stimulus poll on my site regarding how readers plan on using their rebate checks. This is a completely unscientific poll, but over 500 people have responded. So far, over 40% of the responses indicate the reader will use the rebate check to reduce debt. Saving/Investing follows that with 31%. Feel free to leave your vote if you haven’t already!

I filed for an extension on my taxes. Will I still receive the rebate?

Yes. The rebates are based on taxpayers’ 2007 tax returns. Those who file extensions or file late would likely receive their checks later than regular filers, a U.S. Treasury spokesman said last week. The checks will be sent out automatically; taxpayers don’t need to apply.

Can I check the status of my rebate with the IRS?

You can easily check the status of your rebate at the IRS website. The IRS created a web based tool to help you track the status of your economic stimulus rebate. You will need to have your tax return handy because you will need to input some key information from your return, including your SSN, filing status, and number of exemptions. The tool will locate your information in the database and give you the status of your rebate.

Important note about rebate tracker: The IRS recommends using the Payment Schedule prior to using the payment tracker since your payment information will not be available on this tool until the time that your payment is scheduled.

My rebate was lower than it was supposed to be!

There could be several reasons, such as the amount of taxable income you earned, any back taxes or other obligations that may have been owed the IRS, or something else. Also, if you primary form of income was from Social Security or Veterans Disability, it is likely you will only receive $300.

I recommend using the official stimulus rebate calculator, then contacting the IRS if the numbers are different. Good luck.

Is my rebate check taxable?

No!

Update: The economic stimulus checks will be sent out a week early.

Will there be another stimulus check?

There have been a lot of questions regarding another stimulus check. I have covered that topic in the following articles:

• Obama Proposes $1000 Stimulus Check.
• Do We Need Another Stimulus Check?.
• Why I don’t think we need a second stimulus check.

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I filed and paid my taxes yesterday

I’ve been holding off on filing my taxes this year because I owed a lot of money - $1,100. Of course, I could have filed at any time as long as I paid by the April 15th deadline, but for some reason I held off on filing as well.

This is the first year I have had to pay the IRS. I normally receive a decent size refund, even though I usually withhold a fair amount of taxes. (to be fair, for several years I was in the US Air Force and was able to claim several months worth of salary as tax exempt because I served in a military combat zone).

Yesterday I drove to the post office after work to send my tax payment to the IRS. The parking lot was full and the line of cars was backed out into the street about 15-20 cars deep. I drove around the side of the building to the drop box. I’m sure my payment will be safe enough.

Predicting Tax Obligations is Difficult to Do

My wife and I owed a lot of money this year because our tax situation changed drastically from 2006. In 2006, I separated from the US Armed Forces and was unemployed for several months while I looked for new work. This lowered my pay dramatically form the previous year. My wife was in the military at the time and had several months tax exempt combat pay which she earned while deployed to a tax free zone. On top of that, we had some residential energy tax credits which saved us quite a bit of money. We had a nice refund last year.

This year, however, our situation changed again. I had a full time job and earned much more than the previous year. I also had a small amount of income I earned from my business. However, my wife changed jobs and took a $20,000 pay cut (quality of life is more important to us than money), and we didn’t have as much tax free pay or any tax deductions from energy credits. The result of all these changes was owing the IRS $1,100.

I’m not sure what we could have done differently to prevent this, as there were several factors we could not control or predict.

How will next year’s taxes turn out?

I don’t like paying the government a lot of money at tax time, but I also don’t want to give them a huge interest free loan every year. Ideally, my tax return would zero out every year, or at least come very close. But unfortunately, that isn’t always possible to predict, and it gets more complicated when you add in other factors.

I am looking for a new job, which may result in a salary adjustment. I have a small business (this blog and some other on-line ventures) that earns me a money which we now have to report. We also earn a money from from interest and dividends (which is difficult to predict). Then we have to factor in charitable contributions, 401(k) contributions, mortgage interest deductions, and other qualified deductions.

To put it simply, it is difficult to predict tax obligations, especially when your situation becomes more complicated. I will file quarterly estimated income taxes for my business, and I will also make some changes to my W-4 to (hopefully) prevent this from happening again. GenXFinance wrote a great guide on how to adjust your W-4 withholding.

Which do you prefer for your annual tax obligation - to pay or to receive?

As I already mentioned, I would prefer for my taxes to zero out every year. But no matter how much effort I put into it, I don’t see that happening because our situation changes throughout the year.

Some people prefer to owe a lot of money to the IRS. They prefer to use the money throughout the year and are not giving the IRS an interest free loan. The only downfall is coming up with the cash in April, which some people have a hard time doing.

Some people prefer to receive a large refund every year. They look at it as a forced savings account. Even though many people know they are giving the government an interest free loan, they don’t mind because they have a hard time saving on their own and look at a large tax return as “bonus money.” I had a good friend who did this every year. At least he knew he didn’t have the discipline to save on his own.

If you can’t make it zero out, at least get it close. A couple hundred bucks in either direction is usually the best bet. you don’t give the IRS too much of the money you could have had working for you, and you don’t end up owing them too much either.

Which do you prefer?

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

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Image by eliazar via Flickr

Then the letter went on to tell me how convenient it would be for me to pay my tax bill with my American Express Business Gold Rewards Card… In fact, I could earn one Membership Rewards Point for virtually every dollar in taxes that I charged to the card!

You can pay your taxes with a credit card?

Yes you can. It turns out there are two IRS approved companies that are able to process credit card payments over the phone or on-line. The two companies, Link2Gov and Official Payments, charge a “convenience fee” of 2.49%. That was in the fine print at the bottom of the kind letter AmEx sent me.

I’ll be honest, I really like my AmEx business card (especially because I received a nice credit card bonus to sign up for it!). But just because I like my card, doesn’t mean I will use it to pay my taxes!

Does it make financial sense to pay your taxes with a credit card?

I’m not sure what your reward points are worth, but I doubt mine are worth 2.49% on my business card (at least not on this type of purchase). Since I owe $1,100 on my taxes this year, it would cost me $27.39 to pay my taxes. Keep in mind these fees are on top of tax software or accountant fees, and any transaction or interest charges if not paid in full. For me, it doesn’t make sense (¢ents) to use my rewards card.

While it doesn’t make sense in my situation, there can be benefits to paying your taxes with a credit card. If you have a credit card that offers 3-5% cash back, then this might not be a bad move if you have the funds to pay your taxes in full when the bill comes. It also frees up cash flow and allows you to defer payment for another month or so. But for most people, I just don’t see this as being a good option.

As for me, I owe $1,100 and I will mail the check on April 14th. (Traffic is generally awful on the 15th!). It will probably take a couple days for the IRS to process the check, so that money will remain mine for awhile longer – earning interest, just as I prefer!

You can pay your taxes with a credit card, but that doesn’t mean it’s a good idea. If it earns you enough cash back, then consider it, otherwise leave it alone!

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• $50-100 - Credit Card Bonuses (credit card sign up bonus money)
• $50 - TradeKing Bonus (details)
• $25 - ING Referral Bonus ($25 ING Referral)
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• Blockbuster Total Access free trial
• Netflix free trial