Skip to comments.I Have A Tax Question About Schedule M (Vanity)
Posted on 02/15/2011 9:32:28 PM PST by OneVike
I need some advice from some fellow Freepers who may be able to give me some. I am filling out my tax form, I using the 1040A tax form. While filling it out I am directed to a form that is called Schedule M. I found out I qualified for it last year, after I paid my taxes. The IRS sent my wife and I a check for $500.00 with a letter stating we failed to use schedule m which qualified us for an additional deduction. Personally I think it was a way for the democrats to buy votes. Too bad for them it failed.
Anyway, I am filling out my 1040A, and I come to line 40 that tells me to see if I qualify for the Schedule M deduction. Also called the "Making Work Pay Credit". So as I am going over the form I learn that I do qualify for this deduction. Now here is the kicker. Before I take the Schedule M tax credit I owe approximately $1000.00.
Just so you have all the perimeters that might help, between my job and my wife's Social Security (She is a paraplegic as many of you already know) we brought in just over 41,000.00 last year. As I said I originally owed just under $1000.00, but after filling out the Schedule M paperwork I found myself getting a refund. Now I am not one to scoff at a return, especially after the way our savings has been whittled away by medical bills as of late. However, when I learned that I am now getting just under $15,000.00 back... Well quite frankly I figured I made a huge error in my calculations. After all, that amounts to more then a third of my annual income last year.
So I went back over the paperwork with a fine tooth comb, and again came up to just under $15,000.00 return. This just cannot be, so again I went over the paperwork. This time I turned off the radio, closed the door to my office and started with fresh forms that had no numbers to influence me. 30 minutes later I came to the exact same result. Instead of me owing uncle Sam $1000.00, I am entitled to a $15,000.00 refund thanks to the "Making Work Pay Credit".
Is there anyone else who has noticed such a drastic reduction in their tax obligation, or increase in there return by using Schedule M? See, while I qualify for the form, all that pertains to me on the form is line 1a, 3, 6, 7, and 8. Basically it is giving me another $15,725 credit against any taxes I owe.Can anyone shed light on this, because from what I understand anyone making who made less then $95,000.00 single or $190,000.00 married qualifies for Schedule M.
Finally, I do my own taxes every year. I have been for the last 35 years, and never ever have i been penalized for being wrong. fact is, last year was the first time I made an error, and the IRS sent me that check for $500.00 because they said I failed to take advantage of this very Schedule m which I am very, very confused by because of the amount of my return.
You aren’t alone:
You must have done some math wrong there. The best you’re gonna get out of Schedule M is that it takes $800 off the bottom line of your final tax liability. Did you multiply by 2 or 0.02 on line 2 for example.
Line 2 of the Schedule M worksheet?
Or the 1040A Taxform?
I got the same check "out of the blue" last year with the same explanation.
Unfortunately I have no answer, only a ping for what answers you may get.
We decided that since I missed such a large "deduction" that we would go the professional preparer route this time around - no telling what this bunch has to give away that I am missing.
I took the amount from form 1040 line 27 and put it on the form as they asked
I then deducted it from my income and it came up with about 15,700
The I was told to put that in line 40 of my tax form
Take it while you can get it.
Then go back to Galt’s Gulch.
Look at lines 5-9 on Schedule M. You should be doing some math and get something on all of those lines, and it sounds like your $15,000 is just dropping through.
On Schedule M, but I meant line 8 where the 2% calculation is.
I have been doing my taxes for 15 years, besides the BS deductions I just don't trust this bunch. If I can hire a professional for a couple hundred bucks, might as well let his license accept the burden of any potential audit.
That is going to be the approach from my end anyway
Doing my best but I have some stocking up to do to get "Galt" - Keep on, keeping on .... as they say
I just realized I was given the wrong form. I am using an earned income credit one, instead of the schedule M.
Before spending a lot of money on a tax preparer if you only have problems with one form there is another option. Call the IRS phone number listed on your instructions, and ask for help with the Schedule M. They will direct you to someone who will help you understand what you should do. Do it soon before the rush. I had 3 different questions which I took to 3 different people in IRS. They were knowledgeable and helpful in their area of expertise. I have caught tax preparers in errors, so be careful. At least the IRS gives you an ID number in case their people make a mistake that you later have to correct.
This may sound silly but...
On the lines where you multiply by a percentage, are you perhaps having a calculator issue, i.e., where you multiply by 6.2% you enter 6.2 and instead of .062 ?
No, I have the wrong form,. It was printed out with the instruction sheet for schedule M, but it is not the schedule M worksheet I just realized. When I was asked a few questions about the form by a few Freepers, and realized my worksheet was different, then what was being offered to me as advice about.
What I was given was an earned income credit worksheet.
So now I need to hunt down the correct worksheet.,.
You mentioned that your wife is a paraplegic. I recently buried my husband who had Alzheimers. I do my own taxes and was really angry the past few years when I saw I could deduct for our being over 65, and could deduct if either of us was blind, but could not deduct for having to care for my husband 24/7/365. He would have been a lot easier to care for blind than with advanced Alzheimers. I suspect you could say the same about your wife’s situation. Perhaps we need to get on our representatives to change the word “blind” to “any condition that requires constant care in the home” as verified by a medical professional.
That earned income one is a complete joke - my neighbors were bragging about that last year. I was trying to figure out how a married couple with 4 kids living in a $300K house were making things work on a print shop employee's salary.
Turns out they get WIC, Food Stamps, and qualify for this "earned income tax credit" which gives them ALL of the money witheld for taxes back and an additional $8,000 that just comes out of thin air!
I always thought that "people of lesser means" got all their taxes withheld from their weekly checks back - but who knew the IRS now gives welfare payments as well!
Well she was bragging about the new mini-van they boutht with the $9,000 they "got back". Made my blood boil at the time.
Note: they are a good Christian couple with solid Conservative values and I don't blame them for taking what is offered, I'm just pissed that the IRS is acting as a welfare office.
I can't really figure out this "making work pay" credit BS, it probably falls under the same "IRS giving welfare" accusation, but what do you do when they print and send the check without any request? I asked an attorney, deposited the check, didn't tell my wife and promptly purchased a Kimber 1911.
I encourage you to do the same if it happens again!
good point. My wife and i were talking about that very same thing. My wife was wondering why her disabled situation is any different then a blind persons.
I have issues with "K" income statements coming in late every year so I always file an extension and deal with filings a couple of months later.
Good resource for people that can file in April. Like you said, when I have called the IRS or even gone there in person I have never been disappointed in their "customer service" skills.
Yeah that’s kind of confusing. That little worksheet just serves to tell you whether to fill out Schedule M or not. And it’s like five times the size of Schedule M itself. Somebody ping the Flat Tax guys, oh they’ll love this thread.
Now I know why I was going to get $15,000.00 back. Hell maybe I need to quit working and start collecting some free earned income.
Talk about an aximoron (sp?), free but earned? Huh?
I could never do it. I’ll be an old man crippled with arthritis, gout, and half blind before i am forced to retire at 100.
Besides, if I was around 24/7 my wife would probably shoot me for getting on her nerves all day. Even with her paraplegia she does more around the house then 90% of the welfare slugs in the country.
Ping for you to ping if you deem worthy.
“Yeah thats kind of confusing. That little worksheet just serves to tell you whether to fill out Schedule M or not. And its like five times the size of Schedule M itself. Somebody ping the Flat Tax guys, oh theyll love this thread.”
I just clicked your link. It seems they have instructions for the Schedule M, but give the earned income credit worksheet which is wrong. Is this their current hand out or an old one? Suggest that everyone call IRS and point this out to them. If enough of us complain they may fix it.
You and me both! I really got pissed when I first learned that the IRS is giving out "refunds" for more than what a person paid in - what is that all about? there are plenty of other departments that do that.
I would chalk that up to 0'bama's desire to "re-distribute wealth" but its apparently been going on for well before the 0ne.
"Even with her paraplegia she does more around the house then 90% of the welfare slugs in the country."
God Bless you both and I don't doubt you at all!
TURBO TAX is good. It appears that your return is quite simple so 40 dollars will be well spent.
Yes, now you know my dilemma. Problem is, I cannot find the proper form anywhere on their site, and the post office did not have them. That is why I went online to print it, just to get the wrong form that screwed me all up to begin with.
I agree, get the phone bank working on these guys and get them to fix their web site. Make you wonder how many billions of $s has the IRS spen of our tax money just to get it wrong.
That is what happens when you hire acorn.
God Bless you to my FRiend.
This country is in need of a good Revolution.
Only problem is I am getting too damn old to enjoy it if we do ever have one.
I guess I’ll have to settle for the quiet revolution at the ballot box.
I just Googled “Schedule M worksheet” and the top link was the same mistaken one we have all seen. Then I check the next 3, and the 4th one down gave a phone number from last year in July for help with the Schedule M. I will call tomorrow if it is still good. The number is 1-800-908-4184. Let’s all call and give them an earful if possible.
I hear you, and for the sake of my young kid's future, I pray our problems get resolved soon!
Not a chance.
It's easy to think so but having worked for the federal government I can guarantee that gov't workers only claim that they meant to do their goofy antics on purpose. Reality is they sometimes screw up like normal human beings elsewhere but the difference is that 'elsewhere' can go out of business.
GOOD NEWS. I called the number 1-800-908-4184. After waiting through a long introduction I hit the number (1) for talking with a human. After waiting 15 minutes I spoke with Ms. Shelton #1000144926, who was very helpful. First she Googled Schedule M Worksheet, she found that indeed the Schedule M description had for page 2 the worksheet to Earned Income, not Making Work Pay. She went off to talk with someone for a few minutes and came back and read me what she was sending to the people who maintain the computer sites. It even included my comment that one confused tax payer thought he was owed $15,000 Her write-up sounded OK, the only addition I made was that a lot of people were really angry and might call the above phone number to be sure that the computer people really take notice. So, YOU ALL*** HAVE YOUR MARCHING ORDERS. ;-)
I decided last year I'm out of this game - I quit work in 4 months and go SS and start searching for all the oldster bennies I can find. I could work at least 4 years more but why bother with 120 mile commutes, losing most of what I make for very little professional satisfaction
I lose a little over 60% of my pay (which is good - I pay at least ten-fifteen fold in taxes than I ever got my last year of being in the military). In the end, I stand at the checkout line at WalMart and see fatass lazy kid-laden leeches checking out with brim-full carts and paying nothing after swiping their EBT cards. - I, meanwhile, am relegated to paying cash.
I'm gonna start gettin' instead of givin' from then on.
I hear ya. I get tired of watcjing those we pay to sit on their ass get things I would never dream of wasting what money i have left on.
I did get my problem fixed. I owe $584.00 instead of the original $1000.00 I thought I owed and a lot less then the $15,000.00 I erred in think i might get.