Author Topic: Are you getting a tax rebate? Here's what you need to know  (Read 5099 times)

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Offline Lauri

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Are you getting a tax rebate? Here's what you need to know
« on: February 08, 2008, 05:07:07 PM »
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Rebates: What you need to know
The lowdown on Washington's new tax rebates: Who qualifies and how much will you get? What do you have to do? And most importantly: When will you see a check?

February 8 2008: 5:33 PM EST


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NEW YORK (CNNMoney.com) -- Lawmakers have given their final seal of approval to a $170 billion plan intended to spark the slowing economy.

The plan's centerpiece: tax rebates.

But questions remain about how the program will work, and officials at the Treasury Department and IRS are scurrying to work out the details.

In the meantime, here are some answers based on currently available government information and experts' analysis.

Do I qualify for a rebate and how much can I expect?

One-time rebates will be sent to at least 117 million low- and middle-income households, 20 million senior citizens living off of Social Security, and 250,000 disabled veterans.

To be eligible for a full rebate, single tax filers must have 2007 adjusted gross income (AGI) below $75,000 and joint filers must have AGI below $150,000.

Adjusted gross income is not your annual salary. It's equal to gross income minus "above the line deductions," which are reported on page 1 of the 1040 tax form. Above-the-line deductions include deductible IRA contributions, alimony paid and, for the self-employed, some portion of money spent on health insurance or Social Security.

Single filers with AGI below $75,000 will get rebates of as much as $600. Couples with AGI below $150,000 will receive rebates of up to $1,200.

In addition, parents will also receive $300 rebates per dependent child; there is no cap on the number of children eligible.

An example: A couple with one child and $100,000 in AGI will get a rebate of $1,500 ($1,200 + $300). If they have two children, they will get $1,800 ($1,200 + $600).

Tax filers who do not owe income taxes because of various credits and deductions but have at least $3,000 in income - which can include Social Security and disability payments - will get $300 rebates per person or $600 per couple.

I make more than the income caps. What about me?

You might get a partial rebate. It depends on how much your income exceeds the caps.

The stimulus legislation allows for a 5% phaseout rate for households above the income caps of $75,000 for single filers and $150,000 for joint filers.

That means that for every dollar a tax filer earns above those caps, he or she will lose 5 cents of the rebate, said Jason Furman, senior fellow at the Brookings Institution.

Put another way, the rebates of those taxpayers will be reduced by the amount of income above the cap multiplied by 5%, said Mark Luscombe, principal analyst at tax information publisher CCH.

Take a couple with two children. If they make less than the income cap, they will likely get an $1,800 rebate. If they make $15,000 more than the cap, they will see their $1,800 rebate reduced by $750 ($15,000 x 0.05). So instead they will receive a check for $1,050 ($1,800-$750).

A childless couple whose AGI falls below the cap will likely get a $1,200 rebate. But if their AGI exceeds the cap by $15,000, their rebate will be reduced by $750. So they'd get a check for $450.

Single filers with no kids and an income below $75,000 will likely get a $600 rebate. But if they made $80,000, their rebate will be reduced by $250 ($5,000 x 0.05). So they will get a check for $350 ($600-$250).

The point at which the rebate gets phased out entirely will vary. For example, a single filer with no kids whose income exceeds the cap by $12,000 or more will get no rebate, because it will be reduced by an amount equal to or greater than the $600 ($12,000 x 0.05 = $600).

Do I have to pay the rebate back?

No. And here's why.

Your rebate is a one-time tax cut - an advance on a credit you'll receive on your 2008 return.

It's based on your 2007 income initially. If it turns out that your 2008 income and number of children would have qualified you for a larger rebate than the one you received, you'll be sent the difference. If it turns out your 2008 income was lower than in 2007 and you should have gotten a lower rebate, you get to keep the difference.

"If you were supposed to receive a larger payment than you did, you will get the extra money," said Treasury spokesman Andrew DeSouza. "If you received more than what you should have gotten, you will not be penalized."

What do I have to do to get one?

You must file a 1040 or 1040-EZ federal tax return for 2007.

Some people are normally not required to file a return. To get the rebate, however, they have to file a federal tax return.

So when will I get a check?

Treasury Secretary Henry Paulson said Thursday night that the IRS will start sending out checks in early May. Last month, he said it should take about 10 weeks to crank out all the checks. In all likelihood then, you'll see the money sometime between May and early July.

That assumes, of course, that you hit the IRS deadline and file by April 15.

If you're a laggard and have to file for an extension, you'll still get a check but it may not come until the end of the year - probably in time for Christmas shopping.



you can go vote on what youre doing with the debate, at the link .. http://money.cnn.com/2008/02/08/pf/taxes/rebates_what_you_need_to_know/index.htm?cnn=yes


Offline Lacarnut

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #1 on: February 08, 2008, 05:22:48 PM »
Lauri: Thanks for the info; I did not know how my dad was going to get a rebate since he has not had to file in a couple of years.

Offline BEG

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #2 on: February 08, 2008, 05:23:49 PM »
No....we will not receive a rebate.  Thanks for posting this info for those that will be receiving one though.

Offline CactusCarlos

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #3 on: February 08, 2008, 05:54:21 PM »
No....we will not receive a rebate.  Thanks for posting this info for those that will be receiving one though.

Thanks for rubbing that seven-figure income in our faces!  :whatever:

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Offline Chris_

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #4 on: February 08, 2008, 06:23:26 PM »
So this is NOT a rebate -- it is an interest-free loan.

If you are smart and get no refund (smart people don't let the Government have their money with no interest) , I guess you have to pay it back.

Screw it -- it isn't worth the hassle.  I wonder if I can opt out?
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Offline Chris_

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #5 on: February 08, 2008, 11:05:18 PM »
Snap, so 75k and you're phased out? 

And the slugs that wrote the bill make twice that amount.  Harry Reid who claimed this would only benefit "the rich" makes quite a bit more, being in a leadership position.
If you want to worship an orange pile of garbage with a reckless disregard for everything, get on down to Arbys & try our loaded curly fries.

Offline Lacarnut

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #6 on: February 09, 2008, 12:08:24 AM »
So this is NOT a rebate -- it is an interest-free loan.

If you are smart and get no refund (smart people don't let the Government have their money with no interest) , I guess you have to pay it back.

Screw it -- it isn't worth the hassle.  I wonder if I can opt out?


No, you do NOT have to pay it back.

Offline Lauri

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #7 on: February 10, 2008, 02:56:47 PM »
No....we will not receive a rebate.  Thanks for posting this info for those that will be receiving one though.

yep, we arent getting one either.. but nobody is really. when you go get your taxes done, they'll tell ya..

Offline djones520

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #8 on: February 11, 2008, 06:01:58 AM »
Not sure if I'm gonna get the $600 or the $1200.  My wife and my AGI is way below $150k, but she didn't earn any taxable income in 07, so will she be eligible?
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Offline djones520

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #9 on: February 12, 2008, 09:08:27 PM »
We did file jointly.  Guess we'll just plan on the $600 so we can be suprised if we get the $1200.
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Offline Lacarnut

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Re: Are you getting a tax rebate? Here's what you need to know
« Reply #10 on: February 13, 2008, 02:37:20 PM »
We did file jointly.  Guess we'll just plan on the $600 so we can be suprised if we get the $1200.

You will get $1,200; more if you have any kids.