http://www.forbes.com/forbes/2009/0921/outfront-taxes-irs-standard-deduction-not-standard_print.html
Janet Novack, 09.21.09, 12:00 AM ET
Ever since World War II taxpayers have been able to use the standard deduction, a shortcut that gives them some value for deductions that would otherwise have to be itemized. Two-thirds of filers avail themselves of the convenience, which this year is $5,700 for a single and $11,400 for a couple filing jointly. All too simple. Now they are going to work a little harder for their writeoff.
For 2009 returns certain filers will have to fill out a separate form, meaning the standard deduction isn't so standard anymore. They'll need to complete a new 21-step Schedule L. The reason this is necessary: A tax-incentive-crazed Congress has created three super-deductions, goodies that are available to nonitemizers. The draft of L has such gems as: "Divide Line 17 by $10,000. Enter the result as a decimal (rounded to at least three places). If the result is 1.000 or more, enter 1.000." The three deductions, all temporary, are for real estate taxes, sales taxes on a new motorcycle, car or truck and casualty losses in a federally declared disaster. The casualty deduction requires filing Form 4684 as well as Schedule L.
Another new form, "Schedule M, Making Work Pay and Government Retiree Credits," must be filled out by itemizers and nonitemizers alike. It's needed to claim the $400 temporary credit (for single workers earning $75,000 or less and couples earning $150,000 or less) that was part of February's $787 billion stimulus.
Claudia Hill, a Cupertino, Calif. tax pro who edits CCH's Journal of Tax Practice & Procedure, worries that some folks who do their own tax returns as well as some poorly trained paid preparers won't even realize they have to fill M out, since the credit was supposedly paid through lower withholding from paychecks. It gets worse. Before taxpayers even start the 14-step Schedule M, they'll need to complete an 8-step worksheet to make sure combat pay and self-employment income are counted as credit-eligible earnings and prisoner pay and deferred compensation aren't. Plus, older folks who both work and collect Social Security were sent $250 checks by mail, which they must now deduct from any $400 credits they're due.
History isn't encouraging here. The 2008 "Recovery Rebate Credit" was figured wrong on 21 million tax returns.
