We took an early distribution from a retirement plan which resulted in our owing federal taxes this year. Normally, we get a refund.
If I understand a recent article I read, because we owe taxes for 2007, we will not get the economic stimulus monies.
Does this mean I can reduce what I send w/our return by the $1200 we’d be getting otherwise? Based on the guidelines as I understand them, we’d be getting $1200 if it wasn’t for our early distribution and subsequent tax due. So do I send $1200 less than I owe?
I hope I am asking this correctly.
Thanks for any help understanding this!
I understand what you are asking, and the answer is no. You cannot deduct the $1200.00 from the amount you owe, therefore sending less to the IRS. I think it would have been great if they allowed this because it would lessen the cost of sending the $1200.00 separately, but bureaucracy being what it is, you need to send your full obligation to the IRS, now, and then sometime in May of after, they will send you a check for $1200.00