Main > Everything Else
So, about these economic stimulus rebate thingies...
divemaster127:
The way Rush explained this & i talked to my cpa this is a advance on your 2008 taxes, meaning your refund will be reduced when you file next year. Below is a artice I pasted from msn money please take a look & let me know if im wrong
dm
Some Americans are getting awfully excited about the prospect of spending their own money.
The $168 billion economic stimulus package just passed by Congress will ship checks of up to $600 for individuals and $1,200 for couples starting in May. Most households will get these checks, although individuals with adjusted gross incomes of more than $75,000 and couples making more than $150,000 will see less or nothing at all.
Additionally, families will get $300 per child.
The biggest change since the original proposal: Those who paid no income taxes will get $300 as long as they earned at least $3,000, including veterans disability or Social Security benefits.
An estimated 130 million taxpayers will share the rebate money.
Here's what you need to keep in mind while you're waiting:
This isn't free money -- for most people
To produce this cash, Congress created a one-time tax credit to reduce taxable income for most taxpayers this year.
Normally, you wouldn’t see that cash until the spring of 2009, when you filed your 2008 return. But Congress wants to speed that money to you now, so checks will start going out in May.
Smart Spending blog: Rebate? Bonus? One is easier to spend
Remember, this is your money you're getting back, and the rebate checks are basically an advance on the credit you'd otherwise get in 2009.
If it turns out that you're entitled to a bigger tax credit than the checks you receive, you'll be able to claim that when you file your return next year. If you got too much, you won't have to pay back the excess.
But you'll have to account for any rebate checks you receive this year when you fill out next year's taxes. That doesn't mean you'll get less than what you would have if there were no tax credit and rebate check --- but accounting for the checks on your next return will ensure you don't get the tax credit twice.
Still, the rebate checks may cause confusion when people file next year's return. When similar rebates were sent out in 2001, said tax expert Mark Luscombe, "a lot of people were upset to see their (next) refund reduced."
shardian:
Wow, the more I understand, the more my head hurts.
Here is the 2008 excerpt from my link above:
--- Quote ---What will the rebate mean to my 2008 taxes?
Will I owe taxes on my rebate amount next year? What if this year my situation changes and that means my rebate amount should be less?
For most filers, says Luscombe, this year's rebate will appear as a simple gift from the government. The rebate amounts are tax-free.
But filers will have to reconcile any money they receive this year when they file their 2008 returns.
"It harks back to the 2001 situation when we got the new 10 percent bracket and got an advance check for that. Then on next return had to account for it," says Luscombe. "It's expected to be that way this time."
The 2008 tax forms should have a line for the new credit. When calculating taxes next year, taxpayers will have to subtract what they got as a rebate check the previous summer.
"Some people might think that's unfair," says Luscombe, "but they got the money, and they got it early."
One thing taxpayers won't have to worry about is giving back any excess if their 2008 taxes show that the advance this year was actually more than they should have received.
"If it turns out that credit on your 2008 return is greater, you get to take that additional amount," says Luscombe. "If it's lesser than what you got in 2007, you don't have to refund that back to government." The law says the IRS can't recover the extra payment by reducing your 2008 refund or adding to your 2008 tax bill.
--- End quote ---
I've read that thru several times, and the more I read it the more I am confused. :dizzy:
The last line basically says the IRS won't reduce your refund, or make you pay them extra taxes if you aren't due a refund next year. All of the gobbldygook above it makes no sense to me whatsoever.
Subtract from what? Credit what? Huh? Who? When? Where?
It's a gift? But its my money? I have to claim it next year? How?
I get the feeling this whole bill is intentionally being left vague and won't be sorted out until after the elections in the fall. You know, that way the public won't be pissed until AFTER they've voted.
No matter what happens, I get the feeling that the working middle class is gonna end up as always with a sore cornhole once the dust settles.
divemaster127:
I agree this whole rebate process is dirty, people are not going to realize how much this might bite them in the but until after the election is over
ChadTower:
--- Quote from: shardian on February 15, 2008, 11:27:42 am ---Subtract from what?
--- End quote ---
That article specifically doesn't say - a lot of people are using this in a lot of ways to confuse people and further their own little agendas. Confused people are easy to scare.
--- Quote ---It's a gift? But its my money? I have to claim it next year? How?
--- End quote ---
It is all your money. Taxes are your money. You can't claim it - a claim is something different. You may have to declare it, though - just like you declare your state return from the previous year. It may or may not actually affect anything, though.
--- Quote ---I get the feeling this whole bill is intentionally being left vague and won't be sorted out until after the elections in the fall. You know, that way the public won't be pissed until AFTER they've voted.
--- End quote ---
There will be nothing vague about the bill. There can't be - that is not how the law works. What will be vague, and already is, is the eleventy points of view taken on it in the media. No one goes to the IRS website (except perhaps SavannahLion). Everyone goes to some newspaper or columnist, and of course, every article has some slant to do what I mentioned above. Confusion and fear are the tools of the trade.
--- Quote ---No matter what happens, I get the feeling that the working middle class is gonna end up as always with a sore cornhole once the dust settles.
--- End quote ---
They always do.
shardian:
The IRS website does not have anything yet on how this will effect your 2008 return. They just say "Save so and so paper we send you".
Navigation
[0] Message Index
[#] Next page
[*] Previous page
Go to full version