Tax day is finally here and many people wonder what Schedule M is and if they need to fill it out for their tax return. It has to do with the Making Work Pay tax credit, where individuals who qualify receive $ 400 and couples who qualify receive $ 800. So that people could get that money as soon as possible, payroll withholding tables were adjusted to reduce the amount of federal taxes taken out of paychecks, says MSN MoneyCentral. Unfortunately, the few extra dollars per paycheck was so small (not quite same day loans) that many workers didn’t notice. Extra spending to stimulate the economy didn’t occur as politicians had hoped, and there also some confusion regarding Schedule M as it relates to the Making Work Pay stimulus (See NY Times source).
Taxpayers don’t know if Schedule M is something they have to complete or not
This is very important, says MoneyCentral: If you received the Making Work Pay tax credit, you must fill out Schedule M. Essentially, the Making Work Pay tax credit isn’t credited to you until you claim it on your return. This is something more than 4 million 2009 tax filers so far have gotten wrong, according to the IRS. They are fixing the mistake, which will slow down the overall process of reviewing returns. This in turn means that it will take longer for people to receive their refunds.
Where Schedule M applies on your tax return
On your 1040 form, look at page 2. If you look in the “payments†section which is pages 61-71, the credit will go on line 63. It is about the same place on the 1040A form. IF you have the 1040 EZ, then you will do the Schedule M on the back of the form using the worksheet. Filers calculate the Making Work Pay tax credit amount on Schedule M and transfer the result to line 63, says MoneyCentral. It isn’t like payday loans, but is a welcome sight to employed American taxpayers that need a little relief during the recession.
Article sources
MoneyCentral
http://articles.moneycentral.msn.com/Taxes/blog/page.aspx?post=1741262
NY Times
http://www.nytimes.com/2010/04/10/your-money/taxes/10tax.html?scp=1&sq=making%20work%20pay%20credit&st=Search