Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
D.C.
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Mass.
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
N.Carolina
N.Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
S.Carolina
S.Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
W.Virginia
Wisconsin
Wyoming
Law Firm Website Design Companies : The Good, The Bad, and The Ugly

How tax rebates work in stimulus package

  Tax  -   POSTED: 2008/02/12 11:09

On Wednesday, President Bush is expected to sign the economic stimulus bill that provides tax rebates to most low- and middle-income Americans. Here are details of the plan, along with answers to questions about it from readers. Under HR5140, the Economic Stimulus Act of 2008, most working people will get $600 if they are single or $1,200 if they file a joint return, assuming they paid at least that much in federal income tax in 2007.

To help people who earn little or nothing - and might be more likely to spend their rebates - Congress said that anyone who had at least $3,000 in income from a job, self-employment, Social Security and/or certain veterans benefits would get a flat rebate of $300 if single or $600 if married filing jointly, even if they don't owe income tax.

If your 2007 federal tax liability is between $300 and $600 (single) or $600 and $1,200 (married), your rebate will be equal to whatever you paid in tax.

Anyone who gets a rebate of any size will get an additional $300 for each child eligible for the child tax credit in 2008. To qualify, the child must be younger than 17 on Dec. 31, 2008.

Higher-income people won't get anything.

The rebates - including the $300 rebate for kids - start to shrink when your adjusted gross income hits $75,000 (single) or $150,000 (married). Adjusted gross income includes income from all sources, but before most deductions and exemptions have been subtracted.

The rebate is reduced by $50 for every $1,000 you earn above the income limit. It disappears at some point which varies depending on your family size.

Singles with more than $87,000 in gross income and couples with more than $174,000 get no rebate if they have no children.

Those with children can earn a bit more before losing their rebate because it's bigger to start out with. A married couple with two kids, for example, get no rebate when their income exceeds $186,000, says Mark Luscombe, principal tax analyst with CCH.

Rebates will not be sent to nonresident aliens (you must have a Social Security number to get a rebate), estates, trusts or people who are or could be claimed as a dependent on someone else's tax return. That means most high school and many college students won't get a rebate even if they earn more than $3,000 or pay taxes.

The Internal Revenue Service will start issuing rebates - via check or possibly direct deposit - in early May.

The rebates represent a 2008 tax cut. But instead of getting the tax cut next year, when you file your 2008 return, you'll get it this year.

The IRS, however, will use your 2007 tax return to determine who gets a rebate and how much.

If it turns out that you would have gotten a bigger tax rebate based on your 2008 tax return, the IRS will refund you the difference. For example, a middle-income family that has a baby born in 2008 should be able to reap an extra $300 when they file their tax return next year, Luscombe says.

On the other hand, if you would have gotten a smaller rebate based on your 2008 return, you won't have to pay back the difference, says Bob Scharin, RIA Senior Tax Analyst from Thomson Tax & Accounting.

Most rebates will be out by the summer, but if you don't file your 2007 taxes until the extended Oct. 15 deadline, you won't get yours until year end, CCH reports.

Unlike the 2001 rebates, which went only to people who paid tax, the 2008 rebates will go to many people who don't file tax returns.

The IRS says it will work with the Social Security Administration and Department of Veterans Affairs to make sure all eligible individuals know how to get a rebate.

Tax advisers are encouraging people who had more than $3,000 in income from a job or self-employment in 2007 to file a tax return even if they don't owe tax so the IRS knows how to find them.

The IRS has been warning taxpayers not to fall for telephone or e-mail scams that use the rebate as bait. The perpetrators try to trick people into revealing personal information they use to steal their identities. The IRS never sends unsolicited e-mails.

Also be wary of banks and loan companies that offer refund anticipation loans that include the anticipated rebates when a 2007 return is filed. While apparently legal, these loans can be extremely costly.


Legal News | Breaking News | Terms & Conditions | Privacy

ⓒ Breaking Legal News. All Rights Reserved.

The content contained on the web site has been prepared by BLN as a service to the internet community and is not intended to constitute legal advice or a substitute for consultation with a licensed legal professional in a particular case. Affordable law firm web design company
   More Legal News
   Legal Spotlight
   Exclusive Commentaries
   Attorney & Blog - Blog Watch
   Law Firm News  1  2  3  4  5  6 
   Lawyer & Law Firm Links
Car Accident Lawyers
Sunnyvale, CA Personal Injury Attorney
www.esrajunglaw.com
Family Law in East Greenwich, RI
Divorce Lawyer, Erica S. Janton
www.jantonfamilylaw.com
Oregon DUI Law Attorney
Eugene DUI Lawyer. Criminal Defense Law
www.mjmlawoffice.com
New York Adoption Lawyers
New York Foster Care Lawyers
Adoption Pre-Certification
www.lawrsm.com
Chicago, Naperville IL Workers' Compensation Lawyers
Chicago Workplace Injury Attorneys
www.krol-law.com
Raleigh, NC Business Lawyer
www.rothlawgroup.com
Lorain Elyria Divorce Lawyer
www.loraindivorceattorney.com
Connecticut Special Education Lawyer
www.fortelawgroup.com
Los Angeles Immigration Documents Service
New Vision Immigration
www.immigrationnew.com
St. Louis Missouri Criminal Defense Lawyer
St. Charles DUI Attorney
www.lynchlawonline.com
   More Legal News  1  2  3  4  5  6
   Legal News Links
  Click The Law
  Daily Bar News
  The Legal Report
  Legal News Post
  Crisis Legal News
  Legal News Journal
  Korean Web Agency
  Law Firm Directory