Few taxpayers know just how easy it is to settle their prior year tax issues. Taxpayers worry about having to pay their 2007 federal tax, or they ignore a refund with their name on it until time runs out. Either way, stunning new changes in tax preparation techniques are allowing taxpayers like you to pay off their past year taxes (for less than you’d think!) and get their refunds (bigger than you’d expect!).
Late tax filers have a bad rap. The IRS tries to make it sound like missing a deadline is as bad as committing fraud, but of course the average late filer isn’t up to anything nefarious. In fact, late filers are more likely than average to be owed a refund, and their refunds tend to be bigger than normal, too! The people who filed their 2007 federal tax on the due date are the ones who usually owe the Feds money. The folks who waited, don’t.
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This is pretty good news. The Republican senator from Georgia, Johnny Isakson, has introduced legislation that would increase the amount of the present tax stimulus from $8,000 to $15,000. It would also remove the financial caps that are now in place, making it open for more than just first time homeowners.
Sometimes it’s nice having someone working on bills in Congress who did that as a profession in the real world, as Isakson has a background in real estate. His participation was big in getting the initial $8,000 tax credit passed to begin with, and he believes it’s been successful so far. But he also believes that it’s insufficient because, in his own words, “We don’t have a recession in first-time home buyers, we have a recession in the move-up market.” The hope is to take advantage of the reality that there are plenty of very nice homes that have been foreclosed upon, and that a present home owner might like to have the chance on improving their lot a bit with something fancier and larger.
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Make Work Pay
There are a lot of misconceptions going around regarding the new Making Work Pay credit. In order to benefit fully, it is important to understand how you can take advantage of the credit. The most common myth is that the credit will be delivered to qualifying taxpayers through the mail, similarly to the stimulus check last year. However, it is actually distributed through a taxpayer’s check in the form of a reduced tax rate. Because of this, it is your job to check you paychecks and make sure the amount is being added (note that you may need to adjust your withholding to reflect the change).
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