Thread: How big could your tax rebate be?

How big could your tax rebate be?

The details might change before you see a government check, but here's how to figure out how much you're likely to get. Families could receive $600 for each parent, plus $300 per child.

By MarketWatch
As much as $2,100 in tax rebates could be on its way to a married couple with three children if Congress agrees on the final details of the proposed $150 billion fiscal stimulus package, according to early congressional estimates.

More than 117 million American families would receive tax rebates of up to $1,200 if the proposed bill becomes law. Individuals with adjusted gross income of up to $75,000 would be eligible for a $600 rebate, while married couples filing jointly with an AGI up to $150,000 would receive $1,200. After those income levels, the rebates would start phasing out. Taxpayers with children would receive an additional $300 per child.

Meanwhile, workers who didn't earn enough to pay income tax but had earned income of at least $3,000 would be eligible for a $300 rebate, or $600 for couples filing jointly. The checks would be sent out automatically; you don't need to apply.

But don't expect the rebates anytime soon. While the president and leaders of the House of Representatives have agreed on a stimulus package, the House and Senate both need to vote on the package.

If a law is enacted, it will take about two months for the Internal Revenue Service to start sending out checks -- if things go well. The timing of the stimulus package means the tax agency will be addressing this issue during the busiest time of the regular filing season.

"Checks will start going out 60 days after the legislation is enacted. It will take approximately 10 weeks to issue all of the checks. There might be delays on both because of the two weeks at the end of the filing season that are very high traffic for the IRS," said Andrew DeSouza, a spokesman with the U.S. Treasury, in an e-mail message.

Others agreed delays are likely. First, "Congress has to actually pass it," said Mark Luscombe, a principal analyst with CCH Inc. a Riverwoods, Ill., tax publisher. "Beyond that, it's a question of the IRS gearing up to get these checks out, and the IRS doesn't gear up very quickly to do things like that. They're in the middle of return filing season right now, which has already been delayed from legislation in December."

Worth the wait?
Still, some families might find it worth the wait. Here are some preliminary scenarios provided by Rep. John Boehner, R-Ohio:

Example: John Doe had a job for part of the year, earning $9,000. He has custody of two children. He owed no federal income taxes for 2007. Under the proposal he would be eligible for a base amount of $300 for himself (because his earned income was at least $3,000). His earned income would also be sufficient to get a $300 children's bonus for each of his two kids, for a total rebate of $900.

Example: Mr. and Mrs. Jones have five children. After taking available credits and deductions, their 2007 taxable income was $95,000, leaving them with a federal income tax liability of just over $16,600. Under the proposal, they would get the full base amount of $1,200. They would also qualify for a children's bonus of $1,500, bringing their total check to $2,700.

Example: Mr. and Mrs. Senior are retired. As a result of their investment income, the couple paid $4,000 in federal income taxes in 2007, meaning they would get the full base amount of $1,200. They have no dependent children, so there is no children's bonus.

Example: Mr. and Mrs. Ipo have one child. They were able to retire young but still collect dividends and capital gains from a business they sold a few years ago. The couple paid $19,000 in federal income taxes on that income in 2007. They would therefore qualify for the base amount of $1,200. They would also qualify for a children's bonus of $300 because they paid at least $1 of federal income tax in 2007 (even though they had no earned income), for a total check of $1,500.

Here's how the rebates are being figured at this point: The rebates are tied to a reduction of the 10% bracket from 10% to zero for the first $6,000 of taxable income in 2008, Luscombe said.

"I guess they need some legal basis to give a rebate check, so that's what they came up with," he said. "That would be tied to the 2008 return. That's similar to 2001, so basically you would reflect the rebate check as sort of a prepayment on your 2008 return."

The rebate is not taxable at the federal level, and it's unlikely the states would tax it, though that's not entirely clear at this point. "I would think ... the states wouldn't try to tax it," Luscombe said, but recently "they've been decoupling from a lot of this federal silliness" -- so it's unclear what might happen at the state level.

This article was reported and written by Andrea Coombes for MarketWatch.

http://articles.moneycentral.msn.com/Ta ... ateBe.aspx

anyone know if the Illegal Aliens will be getting this

How would you spend your tax rebate?

Exactly as Congress hopes: gleefully and quickly.
21%

For retirement, a Roth IRA or long-term savings.
12%

Pay down credit card debt.
36%

On rent and other monthly bills.
14%

Rainy-day fund.
16%

Donate to a charity.
1%

951 Responses, Not scientifically valid, results updated every minute.

http://articles.moneycentral.msn.com/Ta ... spx?page=2

AirborneSapper7 wrote:

anyone know if the Illegal Aliens will be getting this

Guess that depends on whether or not they work under a phony social security number...Of course if they do, then their little anchors will also qualify for the child credit and boost the reward. I would imagine the ITIN will also be used as a qualifier...

I'm still amazed that the American public is going to accept the idea that borrowed money can bail out an economy which failed because of excessive borrowing in the first place! Can't anyone see that we are simply creating more debt that we ultimately cannot repay? It may feel pretty special to some folks who aren't contributing to the funding of our nation in the first place, but those of us who can see the forest in spite of the trees recognize this as unsound fiscal policy and a cheap attempt to buy votes in November.

Wake up America! You are giving away your children's future and entrenching more solidly the traitorist politicians we need to eject from office. Do not be bought off, especially with your own worthless fiat currency!

What American needs is truth, and the truth is that we are all in big trouble. I think it's time to tighten our belts, live within our means, and face the tough times ahead head-on. The Bush "stimulus" is nothing more than the same old shell game. You can't heal cancer with an aspirin...