Tentative deal reached on tax rebates

[dardhel]

I believe its $600 per adult, $1200 for a married couple. I think the $300 per dependent got axed though.

[disneysteve]

I think the $300 per dependent got axed though.

Nope. It includes $300 per child up to 2 kids, or $600. So a family with 2 kids will get $1,800.

[texastek76]

I looked up the statutory language of the bill this morning and I could not find anything about a limit of two kids.

Also - the reason I went looking for this is because I could find no other site that detailed how the phase out works for AGI greater than $150,000. This language says you reduce your rebate by 5% of every dollar you make over $150,000. So a couple with two kids making ove $186,000 would receive $0.

Statutory language of bill

[sweeps]

I looked up the statutory language of the bill this morning and I could not find anything about a limit of two kids.

I knew I should've had 12 kids.

[Aleta]

There should be a limit on that. Someone deciding to have a thousand kids should not be the governments bailout. We as tax payers shouldn't have to bail out people's decisions for having probably kids that they can't afford. I personally, don't have a problem with the older folks. They pretty much live on a fixed income and probably will be the ones to spend the stimulus money out of need.

[jfoster51]

Hi all long time lurker, first time poster.

Anyway, I am reading that this "rebate " will affect our 2008 tax returns. I found this article on MSN, and it states that:


This isn't free money for most people
The rebate checks are basically an advance on taxpayers' 2009 refunds. After similar rebates were sent out in 2001, tax expert Mark Luscombe said, "a lot of people were upset to see their (next) refund reduced."

The only people for whom this really is free money are low-income folks who won't end up owing any taxes for 2008. Basically, that would be people who earn at least the minimum $3,000 required to trigger the checks or who receive at least $3,000 in Social Security or veterans benefits.

So lets take a situation. Lets say I was expecting to get back $500 on my 2009 return, and my wife and I receive our $1200 "rebate". Does this mean that we would now owe $700?

Am I reading this correctly. It sounds like a lot of people are going to be in big trouble this time next year if they spend that "rebate".

[Aleta]

I understood it to say that they had to wait until the 2007 tax returns came in. I never heard anything about it being an advance for 2008. They did this before and it put some people into a fiancial hole thinking that it was free money.

[jfoster51]

OK, I have answered my own question. God forbid they actually release some information on tax implications.

Anyway the 10% tax bracket which taxes the first $6000 earned per person will be eliminated in 2008. You will have to disclose that you received a rebate check on your 2008 returns or you would basically get the money twice.

I have not been able to figure out the implications for the $300 per child. I am hoping that they increase the child tax credit to $1300 per child in 2008.

This makes me feel a lot better, and I can now pay off unsecured debt with it without worrying about oweing the IRS next year.

[Aleta]

Why would they give out $1,300 per child when they only give $600. for an individual who works? I think that this stimulis package is going to really hurt our economy in the long run. It will take quite a bit of time before the economy will even feel the effects of the money.

[Aleta]

jfoster51: By the way, how many children do you have?

[Diolla]

Why would they give out $1,300 per child when they only give $600. for an individual who works? I think that this stimulis package is going to really hurt our economy in the long run. It will take quite a bit of time before the economy will even feel the effects of the money.

I think he mean't that the current Child Tax Credit is $1000 so if they up it to $1300 then that would make up for the $300 they are giving to you 'early'

So the definition of child is one eligible for the Child tax credit? (<17yo)
I have been trying to find the actual bill instead of all these incomplete articles.

[jfoster51]

I have 2 children, so the full rebate amount would be $1800.

Yes, I was reffering to the child tax credit of $1000 each, and if they would up it to $1300 for 2008 to offset the $300 / child rebate.

I have also been looking for the actual bill, but all sources state that it will not be available till it is signed into law.

[sweeps]

According to this Marketwatch article, there is no limit on $300 rebates for children.

[sweeps]

I usually enjoy reading articles by Liz Weston @ MSN Money. But this article on the tax rebates doesn't make sense to me.

She says:

This isn't free money for most people.... The rebate checks are basically an advance on taxpayers' 2009 refunds...

I disagree. If the lowest tax bracket is being dropped to 0 in 2008, then that is definitely money saved.

Let's say it's February 2009. And suppose if the "stimulus package" never happened, you're due a $1000 tax refund. Fine.

Now suppose the stimulus package did happen. Your tax refund would still be $1,000, that is true. However you were given an extra $600 (or $1200 or whatever) the previous year that you would not have otherwise received. That to me is free money.

[kilapapipa]

As teachers with 3 kids, our tax liability is easy to figure. We take a % out monthly for FIT. I am usually within $300 as a refund or amount we owe.

We will get $2100 rebate and unless I have to list that as a refund in 2008 on my 2008 return, it is a rebate of my 2007 taxes paid in my opinion.

For the previous rebate of $600 in 2001??, I do not recall entering that as a advance refund on the next year's return???????