Across My Desk: What to do with your economic stimulus check

Hey, if you haven't already spent that stimulus check coming your way in your mind, decide to toss it into a retirement account and you could save a penny or two.

Here's the story as told by Fred Schneyer of PLANSPONSOR.com on April 30, 2008:

"Federal tax officials... announced that Americans whose economic stimulus payment is direct deposited into a tax-favored account can pull it out tax and penalty-free.

The Internal Revenue Service (IRS) said the relief is available to help taxpayers who may have been unaware that by choosing direct deposit for their regular tax refund, they were choosing to have their stimulus payment directly deposited as well (see No Action Required for Stimulus Payment: IRS).

The amount withdrawn must be less than or equal to the taxpayer's directly-deposited stimulus payment, and funds must be withdrawn by April 15, 2009, in most cases, the IRS said.

According to the IRS announcement, eligible tax-favored accounts include traditional and Roth IRAs, health savings accounts (HSAs), Archer MSAs, Coverdell education savings accounts (ESAs), and qualified tuition programs, also known as QTPs or 529 plans.

Details on reporting the withdrawals and claiming relief will be included in tax forms and instructions for 2008.

The IRS announcement is available at http://www.irs.gov/pub/irs-drop/a-08-44.pdf.