Thread: Income Tax Rebate Check vs Market Response?

Originally Posted by kistari

According to what I've read, the goal is to have the package passed by President's Day. Although Congress would like the checks to go out immediately, current estimates are June due to the IRS being tied up with filing season.

One thing to remember is that the last time we got those "rebates" we then had to subtract that amount from our withholding when we filed the next tax return. People ended up owing taxes because of this.

Kathy

Yea, what Kathy says too! We're going to have to pay it back, at least some of us.

http://finance.yahoo.com/taxes/artic...JbHuUDN9m7YWsA

How much will I get?

The figures $300, $600 and $1,200 have gotten a lot of attention. That's because they are part of the basic rebate amounts, as follows:

Individual taxpayers could receive rebate checks of at least $300 and up to $600.

Married couples will get up to $1,200.

Most individuals who have income of $3,000 but who do not have to file a return will get $300.

Some taxpayers with children will receive an additional $300 per child.

Now we get to that "additional inquiries" situation noted earlier.

Let's start with the majority of rebate recipients, who will be workers who in 2007 had "net tax liability." Most of them will get a check for $600. That amount, however, is the maximum rebate, so some could get less.

The key phrase in determining the precise amount is "net tax liability." This figure is the amount of tax you owe, both regular and alternative minimum tax entered on line 46 on the 2007 Form 1040, before you continue working down your tax return and subtract certain credits to arrive at your actual, final tax bill.

Most workers will have a net tax liability well above $600, so they'll get the maximum individual rebate amount. But if your tax liability is less, then that will be the amount of your rebate check.

Married taxpayers who file joint returns will get a maximum rebate of $1,200. That's double the maximum possible rebate amount for single filers. Again, it could be less than that depending on your tax liability. But don't worry if only one spouse earned the income. Filing jointly is all that's necessary.

What if you don't have any net tax liability? Thanks to a provision added by the Senate to the House/White House original rebate proposal, you can still qualify for a rebate of $300 for single filers ($600 for joint filers) as long as you have at least $3,000 in income from a job or Social Security or veterans' disability benefits.

Will I get more for my child?

In many cases, there is a rebate bonus for children. But not for all kids.

For rebate purposes, a qualifying child is one who is younger than 17. That means that taxpayers who claim an older college student as a dependent won't get the extra money.

Neither will college kids themselves be happy. The rebate bill specifically makes dependents, or even those who could be claimed as a dependent, ineligible for the rebate. So students who can be claimed by parents won't get rebates even if they held jobs outside class that otherwise would have qualified them for the money.

"The kid may have $3,000 in income, but his parents are paying much more for his college expenses so he's a dependent," says Bob D. Scharin, RIA senior tax analyst form Thomson Tax & Accounting. "It does seem unfair that the child can't claim the rebate."