| Iraci & Phelan |
| Tax and Accounting |
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| Economic Stimulus Payments Information Center Updated March 10, 2008 Starting in May, the Treasury will begin sending economic stimulus payments to more than 130 million households. 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 of retirees, disabled veterans and low-wage workers who usually are exempt from filing a tax return must do so this year in order to receive a stimulus payment. But there are more details to know about. Find out more here and visit this page regularly for the latest updates. The Basics Need some quick and basic information? We have it for you right here. What does it look like for you? Economic Stimulus Payment Calculator Welcome to the Economic Stimulus Payment Calculator In order to determine whether you qualify for a stimulus payment, we will ask you a series of questions. Your entries are anonymous and the information will be used only for the purpose of determining your eligibility. All entries are erased when you exit or start over. Before You Start Have your 2007 Form 1040, Form 1040EZ, or Form 1040A available. You will be entering information from one of these forms. The result from this tool is just an estimate. Allow approximately 5-10 minutes to complete this tool. Please answer all questions on each page. Remember the answer you get is only as accurate as the data you enter! Begin You May Be Eligible Even if You Normally Do Not File a Tax Return If you have at least $3,000 in certain types of income, you may be eligible for the economic stimulus payment. You also may be able to use Free File - Economic Stimulus Payment. See the special types of benefits or income that qualify below: Rebate Scam Alert Be aware that identity thieves are already pushing scams involving the stimulus payments. At least one telephone scam is making the rounds using the proposed rebates as bait. News release IR-2008-11, IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting, has more details. News Releases, Audio Files, Fact Sheets and Legal Guidance Check out the complete list of IRS-issued news releases, audio files, fact sheets and legal guidance related to the stimulus payments. ======================================================= Self-Employed Individuals Below you will find information helpful in answering many questions related to being self-employed individuals or independent contractors. Who is Self-Employed? If you are in business for yourself, or carry on a trade or business as a sole proprietor or an independent contractor, you generally would consider yourself a self-employed individual. You are an independent contractor if the person for whom you perform services has only the right to control or direct the result of your work, not what will be done or how it will be done. Independent Contractor (Self-Employed) or Employee? It is critical that you, the employer, correctly determine whether the individuals providing services are employees or independent contractors. Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors. Do I Need an Identification Number? You must have a taxpayer identification number to operate your business. This is generally your social security number, or an individual taxpayer number. However if you have employees, and in some other circumstances, you will need an Employer Identification Number. Filing Requirements for Self-Employed Individuals Self-employed individuals, sole-proprietors, independent contractors and persons who have net earnings of $400 or more are required to pay self-employment tax by filing Schedule SE, attached to their Form 1040, U.S. Individual Income Tax Return. Employees of a church that receive income of $108.28 or more, but do not receive a Form W-2 for the earnings must also pay self-employment tax by filing a Schedule SE, attached to Form 1040, U.S. Individual Income Tax Return. As a self-employed individual (someone who owns an unincorporated business) or an independent contractor, you are required to report income and expenses on a Schedule C or C-EZ . Your net profit may be subject to SE tax. You must file a completed Schedule SE attached to your Form 1040, U.S. Individual Income Tax Return. As a member of a partnership that carries on a trade or business, or as a member of a Limited Liability Company (LLC) that chooses to be treated as a partnership, your distributive share of its income or loss from that trade or business is included in your net earning from self-employment. These entities must report the business income and expenses on Form 1065, U.S. Return of Partnership Income, along with a Schedule K-1 reporting each partner's net income or loss. You must file a completed Schedule SE attached to your Form 1040, U.S. Individual Income Tax Return. If you have employees, you must pay employment taxes, including Federal income, Social Security, and Medicare taxes. If you manufacture or sell certain products, operate certain kinds of businesses, use various kinds of equipment, facilities, or products, or receive payment for certain services, you may need to pay excise taxes. Estimated tax is the method used to pay (including SE tax) on income not subject to withholding. You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax, of $1,000 or more when you file your return. Use Form 1040-ES to figure and pay the tax. |


