IRS Schedule M: a public service message

I have been getting a lot of hits about the IRS’ “Schedule M”. It’s the one by which you (as an American tax filer) claim the Making Work Pay Credit. This is tax relief portion of the Obama Administration stimulus money. You claim this credit for 2009 if you have “earned income” (that is, income from work), and it’s a maximum $400 for singles and $800 for couples. It phases out for high-income earners, and that would start at about $75,000 for singles and $150,000 for couples.

Schedule M is very confusing. I’ve maintained that for overseas Americans filing a return, it’s completely screwed up. I don’t fault the Service too much for that–the thing is brand new, and the tax law as it applies to Americans overseas is confusing as it is.

I cannot give any of you tax advice over the internet, and we do not have a preparer-client relationship. However, I have pointed out previously where I think Schedule M comes up short. And my best general advice is that if you feel that you aren’t getting the right credit calculated on the Schedule M, that you make a note to the IRS and ask them to calculate it for you.

For people back home, the ordinary deadline is April 15 (the Thursday after next), unless you get one of those extenders. For overseas Americans, you have until June 15. (I don’t know if that falls on a weekend this year.)

For overseas Americans: remember it’s always important that you file. If you can’t figure out the credit, write a note. But make sure you file. The biggest mistake is not filing! Especially if you are eligible for the Foreign Earned Income Exclusion, which seems to be throwing the Schedule M off.

Probably next year they will have the thing down. The way these statutes come out of Congress, in a way, I can’t blame them.