Tax rebate checks will be in the mail by spring / LJWorld.com

Archive for Thursday, February 14, 2008

February 14, 2008

Washington, D.C. — The checks aren't in the mail, but they will be soon.

President Bush signed legislation Wednesday to rush rebates ranging from $300 to $1,200 to millions of people, the centerpiece of government efforts to brace the wobbly economy. First, though, you must file your 2007 tax return.

More than 130 million people are expected to get the rebates, starting around May. Congress, Bush, the Federal Reserve and Wall Street are hoping the money will burn such a hole in people's pockets that they won't be able to resist spending it. And the spending is supposed to give an energizing jolt to a national economy that is in danger of toppling into a recession if it hasn't already.

Whether people actually spend the money remains to be seen. A recent Associated Press-Ipsos poll indicates that most people have other plans. Forty-five percent said they planned to pay off bills, while 32 percent said they would save or invest it. Only 19 percent said they would spend their rebates.

The measure Bush signed - a $168 billion rescue package passed with lightning speed by Congress last week - includes not only rebates for individuals but also tax breaks for businesses to spur investment in new plants and equipment. That, too, would help bolster U.S. economic activity.

Discussion

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14 February 2008
at 2:04 p.m.

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ndmoderate (Anonymous) says…

My wife and I will spend the money….on bills.
14 February 2008
at 3:01 p.m.

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1029 (Anonymous) says…

Bush is such a great president. I can't believe people still say bad things about him. He's even giving money to the liberals who hate him so much. What a great and caring man!
14 February 2008
at 3:25 p.m.

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staff04 (Anonymous) says…

Just want to remind all the Social Security beneficiaries that, even if they otherwise wouldn't have to, in order to receive their rebate they MUST file a 2007 tax return.
14 February 2008
at 3:25 p.m.

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staff04 (Anonymous) says…

http://www.irs.gov/irs/article/0,,id=…
14 February 2008
at 3:34 p.m.

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Valkyrie_of_Reason (Kathy Getto) says…

…and claim the rebate on their 2008 taxes. How dumb this is.
14 February 2008
at 3:46 p.m.

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staff04 (Anonymous) says…

Not sure I understand your question, Windlass.

Kathy, I don't think that is accurate. You have to note that you received it on your 2008 return (because eligible parties will continue to file 2007 returns for several more years and no one should get to double dip), but it is my understanding that it affects neither your income, nor your tax liability for 2008.
14 February 2008
at 3:47 p.m.

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dorothyhr (Dorothy Hoyt-Reed) says…

The way the price of gas is going, I'll be able to fill up my tank, maybe a couple of times. Gotta make those oil companies richer.

14 February 2008
at 3:52 p.m.

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Valkyrie_of_Reason (Kathy Getto) says…

staff - that's good. I just remembered the last rebate we received a few years ago. I know we had to claim it on that year's taxes. Thanks.
14 February 2008
at 4:39 p.m.

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Godot (Anonymous) says…

My understanding is that is an advance on your 2008 refund.
14 February 2008
at 5:20 p.m.

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Buggie7 (Anonymous) says…

Anyone wanting info on the tax rebate can go to yahoo finance section. They have a complete workdown on it. You can only receive checks for those children under 17 even if they are still in school and not working. It is not a advance check out this article on yahoo finance. It tells you who qualifies and how they determine the amount you will get.
14 February 2008
at 5:42 p.m.

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staff04 (Anonymous) says…

Windlass, let me get you a spoon so you can eat my a$$.

If you are referring to immigration, none will get a rebate. Otherwise, your question reads like gibberish.
14 February 2008
at 5:56 p.m.

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ibroke (Anonymous) says…

how many returns do you think there are given that it doesn't pay to work in the US? I get paid to work in the US
14 February 2008
at 5:57 p.m.

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jonas (Anonymous) says…

Not gonna do a damned thing for the economy, but it will at least get me and my wife iPhones, which is all that's important, of course.
14 February 2008
at 6 p.m.

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George_Braziller (Anonymous) says…

Wow! $300. Where will I spend it all? Probably on a tank of gasoline and one month's worth of utilities. This is a bit like the much touted “income tax cut” that he threw up a few years ago. My monthly federal income tax burden went down by a whopping $1.15. If Bush thinks this going to stimulate the economy I think it proves that he has been sniffing the bourbon too long.
14 February 2008
at 7:18 p.m.

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iplaysupernintendo (Anonymous) says…

Airplane tickets for my honeymoon: $300.

Thankyouverymuch. :)

14 February 2008
at 7:35 p.m.

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ibroke (Anonymous) says…

everybody you know that both democrats and republicans in the congress and the house approved this too, they could have voted it down
14 February 2008
at 7:39 p.m.

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Godot (Anonymous) says…

I will never turn down a tax refund from the Feds, since it was my money they took in the first place; however, this won't do anything to solve the serious problems that caused this crisis. This is not an economic crisis; this is a crisis of our financial underpinnings, a failure of the institutions that were entrusted to steward our monetary system; and the people in charge of those institutions failed, miserably, in their duty.

Heads (of those in Congress, in the Senate, and the CEO's and CFO's of the banks, insurance companies and brokerage firms) should roll.

What should happen is for the citizens to rise up in a way that makes the French Revolution look like a playground game of kickball.
14 February 2008
at 7:45 p.m.

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Whip101 (Anonymous) says…

Has anyone considered how much of the national debt is actually owed to the Federal Reserve Bank? And has anyone considered where this 300-1200 dollars is coming from and who/how it will be paid back, (with interest)?
14 February 2008
at 7:49 p.m.

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Godot (Anonymous) says…

Has anyone noticed that, for the first time since records began for the Federal Reserve, that is has a negative balance? This began in January, when the Fed began auctioning money to the banks. This is because the big banks are broke. They do not have any reserves, so they are borrowing from the Federal Reserve so they can make loans.

The Federal Reserve has a negative balance.

How comfortable does that make you feel?
14 February 2008
at 8:31 p.m.

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ontheotherhand (Anonymous) says…

Godot, I'm thinking that the mattress is the safest place for my money right now (and I am only HALF teasing!).

This administration does an excellent job of making people think everything is ok. Seems to be working for most. God, please let me have a lobotomy so I can be happy, too!!

On a more serious note, the $600 is going into my Roth IRA.
14 February 2008
at 8:41 p.m.

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Buggie7 (Anonymous) says…

http://finance.yahoo.com/taxes/articl…
14 February 2008
at 8:42 p.m.

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Godot (Anonymous) says…

ontheotherhand, better put your cash in one of those vacuum sealed bags before you deposit it in the Bank of Sealy. Wouldn't want it to get moldy.
14 February 2008
at 8:58 p.m.

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Godot (Anonymous) says…

ontheotherhand, you might want to wait awhile before you put your refund in a Roth:

http://www.breitbart.com/article.php?…

14 February 2008
at 9:19 p.m.

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Godot (Anonymous) says…

Sleep well.

http://www.federalreserve.gov/release…
14 February 2008
at 9:31 p.m.

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a2thek (Anonymous) says…

Thanks BUsh, the one thing that you try and do to make yourself look good and while it's on your way out. I'll take the money but I'm not going to thank Bush for it. It's something he signed but not his money so it doesnt do much for me to give anybody credit for it. FRee MOney????? Arent there currently a small percentage of people in this world already getting free money or the hand out as I call it?
16 February 2008
at 2:42 p.m.

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Whip101 (Anonymous) says…

http://youtube.com/watch?v=Zv0QlZHu3oc
16 February 2008
at 3:20 p.m.

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Godfather94 (Anonymous) says…

It's about time there is a blog on this subject. I think these rebates are not only done wrong, but not really going to help that much. The people (low income) need the money the most. Shouldn't they receive the higher rebate? After everybody receives there rebate, it will help everybody in that month. then everybody is back in the same boat as they were in before the rebate. How is this helping the economy? Just an increase in national debt. AmI thinking wrong on this?
16 February 2008
at 3:31 p.m.

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pisafromthewest (Anonymous) says…

To all those that say people aren't going to spend the money:

Do you really think that the vast majority of those who put it towards their credit card bill won't immediately go back out next month and max the card again?

And the ones who put it towards gas and their utilities - what are they going to do with the money, from whatever source, that they were _going_ to use for that gas and utility bill?

And if the money goes into an IRA, or even a bank account, it's not going to be just sitting there. Do you think they just hold your money and give it back to you years later with a profit if they don't invest it somewhere?

One way or another all this money is going to be spent, except for that which is (literally or figuratively) put “under the mattress.” The people who do that - well, that is precisely what _causes_ a recession.
16 February 2008
at 4:22 p.m.

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TheBurf (Anonymous) says…

Last time I checked, I still had it pretty good. Life is great.
16 February 2008
at 4:46 p.m.

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notajayhawk (Anonymous) says…

Valkyrie_of_Reason (Kathy Getto) says:

“staff - that's good. I just remembered the last rebate we received a few years ago. I know we had to claim it on that year's taxes. Thanks.”

It does not have to be “claimed” on next year's taxes, but reported. This is because people who didn't get their rebate this summer will have a chance to get it with their refund next year.

This is sort of an advanced credit. It is _not_ part of the refund you would otherwise have gotten next year, but it is a _new_ credit against taxes owed for _this_ year's income (with the amount based on _last_ year's income). But rather than you getting the credit (and therefore the extra money) when you file your return next year, they're paying it out now. If for some reason you're eligible for it but don't get it this year, you can claim it as a credit when you file your 2008 taxes. Also, if for some reason you were not eligible (or not eligible for the whole amount) based on your 2007 income, but you will be based on your 2008 income, again, you can claim it as a credit next year. Which is pretty good, actually, especially because if you get the whole credit this summer based on your 2007 income, but your 2008 income would make you ineligible for all or part of it, you don't have to pay it back. So more people will have a chance to get the credit (albeit some will be later), but obviously they'll need to know if and how much you got this summer.
16 February 2008
at 4:52 p.m.

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bolshavik_vw (Anonymous) says…

Yeah the only reason he is doing it, is because he is in hot water! with the US! And it is his way of trying to make himself look good. When he is a true idiot! He does not care about this country or the people in it. And he knows that he is on his way out. So instead of being impeached, (Which should of already happend to him a while back.) He is trying to pull the wool over all of us. And give us money. Gee what is it? Reimbursement for all the extra money we had to shell out for rising gas prices. No it's the extra money that he saved by cutting the budgets on Patients Bill of Rights. Or the Domestic Violence Laws that were passed in 2006. That thanks to this Moreon! no longer exist! democratic votes in november! we can't afford another loser for president!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

16 February 2008
at 4:55 p.m.

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Godot (Anonymous) says…

Whip101, that is an intriguing video. It is along the lines of an idea I've been turning over in my head.

I think that the fuel that keeps the unbelievably currupt engine of Wallstreet churning is the PreTax Savings money flooding into mutual funds each and every month, just like clockwork, from the paychecks of hardworking Americans who believe they are doing the right thing by saving for the future. Congress tells us they did us all a favor when they set up the provision of the tax code that allows us to “shelter” our earnings from taxes so that we can save up for retirement. What they did was trick us all into feeding the brokers and money managers, the PreTaxPigs.

This PreTaxSavings inflow is what enables the fund managers and brokers to earn millions in commissions, fees and bonuses; they get their millions in bonuses even when their funds fail to make money for the investors.

After many years of making contributions to my 401K, I have stopped. I told my employer to stop taking money from my paycheck to send to Wallstreet. I am on a PreTaxSavings Strike.

Why should I continue to feed the PreTaxPigs when my investments do not do much better than if I had put the money in a simple CD all that time? Why should I pay them the fees? And why should I be building up a fund that I will have to pay taxes on in the future if I want to use it, when I do not even know what that tax rate will be?

How many of us contribute to a 401K or 403(b) or 457 account, but still owe on a mortgage or have credit card balances or student loans or car loans? How silly is that? We are borrowing money from the Banks, paying them interest, in order to give it back to the brokers who are often owned by banks, paying them fees and expenses for the favor, so they can gamble it on Wallstreet. And for what? To save a little on income tax? Most of the middle class do not pay enough in income taxes to make it worth the gamble.

Join me in my PreTaxSavings strike. Tell your employer you are stopping your Pre Tax contributions. That is the first step to becoming free.

The next step requires extreme discipline. You must take the same amount of money that you had been investing in your retirement plan and put it toward paying off all your debt.

Pay off all your debt, all of it. And do not fall into the debt trap again.

Once you are debt free, you can resume saving, but save dollars you have already paid taxes on, and do not participate in the sham of “pretax” saving. Stop feeding the PreTaxPigs! Stop letting Washington control the way you plan for your own future. Do not allow them to trick you into funding Wallstreet.
16 February 2008
at 5:07 p.m.

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pisafromthewest (Anonymous) says…

bolshavik_vw (Anonymous) says:

“we can't afford another loser for president!”

Actually, we can't afford a bolshevik for president.

Geez, I have never in my life seen so many people find so many reasons to b*tch about _getting_ money!
16 February 2008
at 6:48 p.m.

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been_there (Anonymous) says…

I assume that if you owe back taxes or child support the rebate may go to pay those. I could be wrong but I seem to remember that happening to some people the last time.
16 February 2008
at 7:10 p.m.

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Godot (Anonymous) says…

notajayhawk, you said that this “gift” from the government is a new credit toward 2008 taxes owed. No, it is a debit.

Assume you get a $600 rebate this spring. On your 2008 tax form, the tax on your income is $3000. There will be a line that adds the $600 “rebate” back on to that tax bill, making the total tax bill $3,600.

I guess there will have to be another “gift” from the government next spring to offset the bite from this years' gift.
16 February 2008
at 10:30 p.m.

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notajayhawk (Anonymous) says…

been_there (Anonymous) says:

“I assume that if you owe back taxes or child support the rebate may go to pay those. I could be wrong but I seem to remember that happening to some people the last time.”

That would be true; they will most definitely keep it, as with any tax refund.
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Godot (Anonymous) says:

“notajayhawk, you said that this “gift” from the government is a new credit toward 2008 taxes owed. No, it is a debit.”

Sorry, you're wrong about that. It is a credit, like the EIC, child tax credit, etc. It appears this is a refundable credit (i.e. one which not only reduces tax liability but will result in a refund if you don't owe that much) like the EIC, and also like the EIC, you can get it in advance (as most people will be, in the checks that come this summer).

Using your example, I assume there will indeed be a new line on the tax form that asks how much you got in this summer's rebate. There will also be a line for the credit itself. So, using your example, your tax liability for next year of $3,000, will be reduced by the new credit (which itself was reduced by the amount you already received). Or in simple English, your liability would be $3000, minus the $600 credit, plus the $600 you got in the rebate check, for a tax liability that's exactly the same. If for some reason you are eligible for the credit but did not receive it, then you will still claim the credit on your 2008 tax form (but not report the rebate, since you didn't get it), and the full $600 credit will be applied to your 2008 tax liability, which will then be $2,400.

(Or actually, and more likely, there will be a worksheet or new form to file to figure the amount of the credit you can take on your 2008 return. So if you're entitled to the $600 and already got $600, the credit you can claim next year will be $0, and your liability will be unchanged, but if your eligible and didn't get it, you will take the credit at that time to reduce your liability by $600.)

From “Joint Commiitee on Taxation Technical Explanation”

“The provision includes a recovery rebate credit for 2008 which is refundable. The credit mechanism (and the issuance of checks described below) is intended to deliver an expedited fiscal stimulus to the economy.”

http://www.house.gov/jct/x-16-08.pdf

I'm sure you've heard of the cost of the rebates. If they were just giving you money they'd be collecting back next year, there would be no cost, would there?
16 February 2008
at 10:45 p.m.

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been_there (Anonymous) says…

“That would be true; they will most definitely keep it, as with any tax refund.”

It is also true if you win a large amount in the state lottery. Told someone that when it first started and he didn't believe me until a friend of his won several thousand in the lottery and didn't see a dime. The state took it all for back child support.
16 February 2008
at 10:47 p.m.

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jumpin_catfish (Anonymous) says…

Him, him, him, that's all I'm hearing. Didn't the democrat controlled congress fall all over itself to pass this, well didn't they whiners? How do some of you sleep with that bush hate thing all twisted up inside you? Just take it, spend it, save it, burn it whatever, it was my money to begin with and it will be my money again.
16 February 2008
at 11:57 p.m.

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a2thek (Anonymous) says…

This money will certainly let deadbeats off the hook that owe back child support being they still wont have to pay a dime of their own money and their free money will relieve them of their financial responsibility. I know it's a good thing because alot of kids will get their dues finally. But overall it sure sounds like in alot of ways a way to get people off the hook oweing either back taxes or child support.

17 February 2008
at 12:43 a.m.

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misseve (Anonymous) says…

OMG now im super confused…

I never got any of the last “rebates” so i have no idea how this will affect me… all i can say is if i do get it this year and it seems i will, it will go on the new car i just had to purchase because the last one went poof…
17 February 2008
at 12:44 a.m.

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notajayhawk (Anonymous) says…

a2thek;

I agree, but as you said, it seems like it's more important that the kids get the money than the deadbeat gets out of his debt. Besides, by the time someone gets reported to the IRS for back support, I'm betting they're behind by more than $600.
17 February 2008
at 1:31 a.m.

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notajayhawk (Anonymous) says…

misseve (Anonymous) says:

“OMG now im super confused:”

“I never got any of the last “rebates” so i have no idea how this will affect me: all i can say is if i do get it this year and it seems i will, it will go on the new car i just had to purchase because the last one went poof:”

I hate poofy cars.

It's not that confusing, although trying to read through my prior post, now I'm confused. I'm not doing a real good job trying to explain this.

Let's see if I can get it into simple terms: This is a new, one-time, refundable tax credit. Being as how it was a little late to institute it for the 2007 tax year, as the 2007 forms were already printed, in use, and in many cases already filed, they made the credit effective for the 2008 tax year, but didn't make people wait until they file their returns next Spring to get the money. They're going to go ahead and disburse it now, based on what you made last year.

The real good thing about this is that the credit is based on either the 2007 *or* 2008 income, whichever turns out to be more beneficial. If for some reason your 2007 income doesn't qualify you but your 2008 income will, you won't get the rebate check now, but you will still be able to claim the credit when you file your return next year.
17 February 2008
at 8:44 a.m.

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been_there (Anonymous) says…

Here's another thought. If the deadbeat parent's (not all are male) child is on public assistance and the majority of the child support goes to SRS, then SRS will get the money improving their financial bottom line.
17 February 2008
at 8:51 a.m.

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been_there (Anonymous) says…

So in some cases, the government just gave themselves money provided the deadbeat parent files taxes at all. I knew a man that refused to work because the government would just take it for child support. He would stay home and take care of his live-in girlfriend's kids while she went out and supported the family. If he did work it was only if he got paid under the table. It would be interesting though to find out how much of the rebate money went back to the government for money owed to the government.
18 February 2008
at 8:45 a.m.

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gr (Anonymous) says…

Come on people.

The rebate checks are not coming from the government, federal reserve, other programs, or as a form of additional debt.

It's coming from YOU!

You see, the government stole YOUR money, thousands of dollars, from you all year. It's excess taxes they didn't really need to collect. They've used it to loan (or give) to other countries, private businesses, or whatever throughout the year. Now they are saying: “Do we need to spend/waste all of it? Whether we have it or not, we will spend the same amount - or more. Let's give some of it back to the people. They will waste it as much as we do, and perhaps pepetuate the economy living beyond it's means.”

Then they cast a few of YOUR own pennies back at your feet hoping you will think the government is so gracious and beneficial to all mankind. Maybe you will depend upon the government and let them think for you.
— And it's already happening.

Everyone should write their congressman and say,
Thank you for returning a small part of MY money you took from me against my will. I don't plan on wasting it as you will with the portion you have retained.