Wednesday, February 25, 2009
Correctly Calculate Your Recovery Rebate Credit for 2008:
Many news outlets have already reported that a recent sampling of already-filed tax returns shows that 15% of filers have miscalculated their 2008 recovery rebate credit. What is the recovery rebate credit?
In short, it is the amount the government owes you if either 1) you did not receive a stimulus check last year, or 2) you received less than what you should have received. There are a few simple steps you can take to easily avoid miscalculating your rebate credit.
First of all, do not put down the amount of the rebate you received on the recovery rebate credit line. You need to enter what you haven’t yet received. To find out what you’re owed, all you need to know is the amount you have received. If you don’t know this number, it’s best to check with the IRS by
calling their Recovery Rebate Hotline at 1-866-234-2942.
If you’re using tax software to file your return, you can put in the amount of your stimulus rebate, and it will automatically calculate the difference, i.e. what you are owed. You’ll spend a lot more time if you try to calculate the number by hand or use the IRS worksheet (which is more than one page long) to calculate it. If you want the IRS to calculate it for you, you can enter “RRC” next to the recovery rebate credit line. If you want nontaxable veterans’ disability or death benefits to be factored, also add “VA” next to the line. If you want nontaxable combat pay to be factored, also add “NCP” next to the line. (This information is taken from the IRS website.) However, for the fastest calculations, and to expedite your tax refund, use tax software to automatically calculate your recovery rebate credit for 2008.