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My grandmother is 83 and lives on Social Security. I just found out that she hasn't filed an income-tax return to get her economic-stimulus check from the IRS. Is it too late for her to submit a return?
M.F.L., Clearwater, Fla.
No, it isn't. But the deadline is October 15, so she should act soon (or you should act on her behalf). Most people received their economic-stimulus payments automatically after filing their tax returns.
Many disabled veterans and retirees like your grandmother don't have to file a return because their benefits aren't taxable. But they have to file this year in order to receive their rebates. A little more than five million people -- about one-fourth of those who don't normally need to file but who are eligible for stimulus payments -- still haven't completed the paperwork necessary to get their money.
Individuals who don't have taxable income or don't normally need to file a tax return will generally receive a rebate of $300 per person ($600 per couple) as long as they have at least $3,000 in qualifying income, including certain benefits from Social Security, Veterans Affairs or Railroad Retirement. An individual who is claimed as a dependent on someone else's tax return, however, won't qualify.
All your grandmother has to do is file Form 1040A with her name and other basic information, such as her address, any dependents, the amount of qualifying income and her signature (go to www.irs.gov and click on "Rebate -- It's Not Too Late," then scroll down the FAQs page).
The government is working with seniors and veterans groups to provide in-person tax-preparation seminars at senior-housing and assisted-living facilities and at Veterans Administration hospitals. You can also get help through the IRS's 400 local Taxpayer Assistance Centers.
What's this proxy fuss?
I recently received several phone calls from the Altman Group, a proxy solicitation firm, pleading for me to return my proxy card to vote on changes for the Fairholme fund. I read the proxy material and discovered that the board of directors was recommending sweeping changes to this highly successful fund. Should I dump Fairholme and look for a similar offering? Scott Brennan, Charlotte, N.C.
Those proposed changes have already passed, but there's no need to pull the plug on Fairholme (symbol FAIRX), a member of the Kiplinger 25. The revisions are designed primarily to update legal language in Fairholme's prospectus so that it meshes with Securities and Exchange Commission regulations that have changed since the fund's inception in late 1999.
The only change that's immediately significant: Fairholme has removed a self-imposed limit that barred the fund from owning more than 10% of a company's outstanding voting shares. Co-manager Bruce Berkowitz says the amendment was necessary because he had been forced to stop buying shares of companies he liked in order to avoid crossing the 10% threshold. Increasing Fairholme's concentration in a few stocks could add to the fund's volatility, but it doesn't represent a change in the fund's investment philosophy or process.
The Altman Group badgered you because Fair-holme fund had to garner a minimum number of votes to pass its changes. Most shareholders toss proxy materials without a second glance, so funds sometimes hire proxy solicitation firms to pry responses from their shareholders.
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