Don't Mess With Taxes

The ingenuity of the American taxpayer is something to behold.

I'm talking about the creative way that some married couples have devised to speed up receipt of their economic stimulus package payment, aka tax rebate.

As blogged about last week, the IRS has announced the delivery schedule for the checks based on the last two digits of a taxpayer's Social Security number. Some taxpayers who included direct deposit information on their 2007 returns will see the stimulus payments show up in those accounts as early as May 2.

Mailed checks will take a bit longer, but the IRS says the whole rebate process should be wrapped up by mid-July.

You can check out the complete delivery schedule here (and I must say that I'm very proud of my tables!).

Marital and tax rebate bliss: For married filers, the Social Security number that will be used is the one belonging to the spouse listed first on the return. Even in 2008, that's usually the husband. In the case of the hubby and me, that's fine; since our check will likely be mailed, his tax ID info will theoretically get us the money a week earlier.

But, reports CCH, a leading tax and business law information and software provider, if the wife's tax ID will get your rebate check in the pipeline sooner, feel free to flip the names on your return. An IRS spokesperson told CCH that such "reversed order" will not cause any problems.

As long as the Social Security number and name matches are correct, the agency has no problem with taxpayers listing spouses in any order they wish. The only difference it will make this year is to determine which ID number is used for the rebate distribution program.

Calculating the delivery advantage: However, is it really worth it? Are you really that impatient or that in need of the money a few days sooner?

CCH notes that for electronic filers who will have their rebate money directly deposited, "flipping the sequence in which spouses appear on the return for an earlier payment seems hardly worth the risk, despite IRS assurances, since, at best, a payment would be accelerated by two weeks: direct deposits for 00 last digits start on May 2 and for 99 last digits end on May 16."

And it might not even matter. The IRS stresses that the announced distribution schedule does not guarantee any particular delivery date.

A small percentage of tax returns will require additional time to process and to compute a stimulus payment amount, says the IRS. In those cases, the rebates may not be issued in accordance with the schedule, even if the tax return was processed by April 15.

But just in case you and your better half have widely divergent Social Security numbers and want to give the name entry flipping a try, I wanted to pass along the idea.