Tax day is almost upon us, and many taxpayers are wondering what Schedule M is and whether they need to fill it out on their tax return. It relates to the Making Work Pay tax credit, where qualifying individual filers receive $400 and qualified couples 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 small enough (not quite same day loans) to where many workers didn’t notice. Extra spending to stimulate the economy didn’t occur as politicians had hoped, and there also was some confusion regarding Schedule M as it relates to the Making Work Pay stimulus.
Taxpayers aren’t sure if they need to complete Schedule M
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
Look at page 2 of your 1040 form. In the “payments” section (lines 61 through 71), the Making Work Pay tax credit amount belongs on line 63. It’s in a similar place on the 1040A form. On the 1040-EZ, you figure 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 anything like payday loans, but it is something that was a welcome sight to millions of employed American taxpayers in need of relief during the recession.