Personally, I think the whole thing is a waste of money. As I said before, in an election year it just makes it look like the politicians are doing something. All it will really do is add to the debt our children will have to pay back someday. We are going to borrow money from China so that Americans go go buy some more Chinese products. We are not a consumer culture. We are a culture being consumed by our greed. The money SHOULD go to those who can't afford to pay taxes, to help them pay their heating bills this winter.
Question about Proposed Tax Rebate
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An update here. At least according to CNN the final bill is advance on next year's refund. So no it is not taxable at your marginal rate but of you would have received $1000 back and you a re entitled to a $300 rebate now you will see only $700 back next year.
i will try to verify this. That differs from earlier bills but anything can happen asa bill moves through congress.
i will try to verify this. That differs from earlier bills but anything can happen asa bill moves through congress.
Seems kinda strange. What if you don't have a refund coming next year? Does that mean that you'd have to pay back the $300 in addition to what you owe then? I don't think that's what is intended at all. A rebate, by that name, needs to be exactly that - a return of money you already paid. (I realize a lot of folks who pay no federal tax or even receive the EICs will also get a "rebate".)
I agree with Bogy - stupid idea - but for a different reason. Let's make the existing tax cuts permanent instead...
I agree with Bogy - stupid idea - but for a different reason. Let's make the existing tax cuts permanent instead...
Sure, then we can just go deeper into debt year after year.
"Hey boss, I can't seem to make ends meet on the salary you pay me. Could you pay me less and I'll see if that helps?"
BTW, keep in mind that while any "rebate" or whatever it gets called might not be taxable income as far as the feds are concerned, that doesn't mean that your state might not want to get their cut, especially since less taxes paid in at the federal level means more unfunded mandates for the states to pick up. Iowa is discussing whether this money should be taxed or not.
Bogy - We will never agree on this, that lower federal income tax rates = higher tax returns, but the data support our position. I can't argue with your second statement, but in PA any "rebate" to the extent that it offsets federal tax paid won't be subject to the PA income tax. After all it's not additional income now is it? We already paid the PA tax on the income that that rebated federal tax amount represents. (I can't speak for those PA residents who don't pay federal income taxes. Their "rebate" might offset their PA EIC to some extent if they get that benefit.)
if the CNN Story is correct yes----and that was the way it was with the 2001 rebate. Originally this was not the case this year but it amy ahve changed when the Senate voiced concerns. Or it could be that the CNN report is incorrect. I can't say.
IIRC, the 2001 rebate ($300 or $600 in July of that year ??) came off the 2001 taxes. Rates were lowered for 2001 and beyond and the rebate represented to some extent the overpayment in the first half of that year. Do you remember it differently?
Because of rate changes the effect was obscured but the 2001 rebate in effect lowered your expected refund. Having said thata dollar today is better than a dollar next April. But in the end it was awash if yu do not consider the time value of money.
but in the original versions of this bill this was not taxable in anyway. I only saw one article saying that this is handled like the 2001 situation and is just an accelrearation of next year's refund. The article coudl ahve been wrong or the way the tax is handled may ahve changed.
but in the original versions of this bill this was not taxable in anyway. I only saw one article saying that this is handled like the 2001 situation and is just an accelrearation of next year's refund. The article coudl ahve been wrong or the way the tax is handled may ahve changed.
FWIW the CNN MONEy site now hasa different article and the line indicating that this is taxable is no longer there. The current wording states that this is effectivelya one time tax cut. That si more in line with earlier versions.
Rebates: What you need to know - Feb. 8, 2008
Rebates: What you need to know - Feb. 8, 2008
Near as I can tell this article tells the whole story How Will the Economic Stimulus Tax Rebate Affect 2008 Tax Returns? » Consumerism Commentary: A Personal Finance Blog
Basically it seems that it si an advance but an advance on a one time credit that will be calcualted when you do your 2008 return in early 2009. Aso FWIW it amkes the point that the calculation is made based on your adjusted gross income (AGI) Does that help?
Basically it seems that it si an advance but an advance on a one time credit that will be calcualted when you do your 2008 return in early 2009. Aso FWIW it amkes the point that the calculation is made based on your adjusted gross income (AGI) Does that help?
In a few words; it's merely an advance against next year's tax refund.
It's neither a rebate nor a bonus
If this is an advance on a refund I supposedly would get in 2009, if I actually get a check the first thing I need to do is send it back. I don't get refunds. I never pay more in taxes than I will owe. I always owe taxes in April. Even if I didn't, if somehow I miscalculated so much that I was owed money, it would just be applied to my next quarter's payment. I think a lot of people are going to be very upset next year when they don't get their refund.
In a few words; it's merely an advance against next year's tax refund.
It's neither a rebate nor a bonus
Not quite. They passed a one time credit that you would normally get next year but this rebate allows you to get it now. Basically it is yours to keep. bTW I am not sure that sending it back is an option. I suppose that you could file it as aan estimated tax payment. That might make them wonder why you did not do it every quarter but in the end it would get the job done.
When I stated that I would send it back, what I meant was that I would need to send it in as part of my quarterly payment.
Since your total 2008 tax liability will be reduced by an amount equal to or greater than the amount of the rebate there should be no need to send anything additional back with your quarterlies. you should be in the same position you were before it happened--except that you may have some aditional cash now.
In my case it goes to college related expensees for my two sons.
In my case it goes to college related expensees for my two sons.
For me it would help to support my Kenyan refugee. Anybody have a job for a returned Peace Corps Volunteer? She thought she'd have six more months to get her resume together and start applying. Even her references for the last two years are slowed down because normally they are all written and signed before the volunteers leave country. She just got hers from the national director on Saturday. She signed it and got it back in the mail yesterday. It goes back to Kenya to the director, and then they will mail her a copy back. About a week each way, if things go well.
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