New $800 tax rebate ?

[dyne]

It has been reported that President Bush is CONSIDERING creating another tax rebate
to help alleviate the problem with the economy.
An $800 tax rebate for a single person and a $1600 rebate for a joint return is possibile.
lt MAY be limited to those with low income or with children.
This is all speculative as it only exists in the mind of the president. !
We will no doubt receive telephones calls asking about this even before the law is created.
The last $300 tax rebate in 2001 caused much confusion. Here we go again. Do they
not ever learn?

[KBTS]

Of course politicians never learn. Why do you think that every time they try to "simplify" the tax code, it winds up being much worse after they are done? Look at the "uniform definition of a qualifying child" from 2005 and how there is still confusion over this one.

Just think of this as additional job security for all of us on this board.

[Larmil]

Go Back 20 Years

It has been reported that President Bush is CONSIDERING creating another tax rebate
to help alleviate the problem with the economy.
An $800 tax rebate is one possibility. lt MAY be limited to those with low income or
with children.
A $1600 tax rebate is also being considered for households. This is all speculative!
We will no doubt receive telephones calls asking about this even before the law is created.
The last $300 tax rebate in 2001 caused much confusion. Here we go again. Do they
not ever learn?

If memory is correct (and sometimes it isn't) 1981 gave us the biggest (at time) tax cut in history. 1982 gave us the biggest (at that time) tax increase in history. Sometimes I think President Reagan had more influence over our current president than his own father.

[BP.]

From today's news:

"Taxpayers could receive rebates of up to $800 for individuals and $1,600 for married couples under a White House plan. Although lawmakers were considering smaller rebate checks and more money for food stamp recipients and the unemployed, Bush told congressional leaders that he favors income tax rebates for people and tax breaks for business investment.

Aides to lawmakers involved in the talks said the White House also wants to eliminate the 10 percent income tax bracket for one year and issue a rebate within months. Advocates for the poor said that tens of millions of people in lower income ranges would be left out or not fully feel the benefit of the White House plan.

Lawmakers were instead discussing a $500 rebate for individuals, the aides said, with details for couples and people with children still being negotiated.

The rebates would likely be limited to individuals with incomes of $85,000 or less and couples with incomes of $110,000 or less, the aides said, speaking on condition of anonymity because no final decisions had been made."

[taxmandan]

Here we go again. Do they
not ever learn?

They learned many years ago how to fan the flame of positive buzz among the masses. Announce some sort of tax cut and let the media and their darlings debate it for the next 10 months, that should take the heat of Congress and the White House for doing something legitimate to recover from this recession we are in today. As long as we have foreign money to spend to support the deficit spending, we can rest assured that our lifestyle choices will not be diminished one bit by economic constraints.

[Chief]

Tax rebates

I only hope that what ever comes out of this debacle will be an automatic check payment and not something that is handled outof one's tax return. The telephone excise tax refund does not need repeating nor any of the other tax credits that are in place. This credit to be fast must be an automatic type of thing and be completely out of our hands. As the prophet of old proclaimed many years ago, "Woe if me" is a timely response of all tax preparers.

[Jesse]

Isn't it an "advance" of 2008's refund designed to stimulate the economy now? $300 was bad enough, give an advance of $1600 to a couple that normally would receive a refund of say $500 aren't they potentially going to end up owing $1,100 when they file in 2009?


I hear it already - come into Furniture and Appliance and spend your advance before your get it da da da da da.......................

[DaveinTexas]

This is exactly what I'm thinking

Isn't it an "advance" of 2008's refund designed to stimulate the economy now? $300 was bad enough, give an advance of $1600 to a couple that normally would receive a refund of say $500 aren't they potentially going to end up owing $1,100 when they file in 2009?


I hear it already - come into Furniture and Appliance and spend your advance before your get it da da da da da.......................

What happens when we ask the client, "Did you get that check that Bush sent out over the summer?" This brings back bad memories when the client would say, "No, I can't remember that."

I can see the CP2000s now....I suppose this will be a boon to those of us who charge by the hour, and to the furniture stores/auto dealerships too!

[Mike Mac]

2006 Telephone rebate

I can't recall seeing the number of persons who filed a return last year only due to the Telephone credit. An objective of the proposed rebate is to get them out quick and to "deservng" taxpayers. Perhaps sending them out based on the 2006 filing season would help that objective.

[Girard Van De Lay]

Phone Calls coming in

already. The people think that they should wait and get the extra money on their refund because they heard it on the news that they will get $800 or more if you are a couple. I told them that nothing has been decided yet and they insist that since Bush talked about it they are going to get it. Just one more thing to screw up the tax season they started with AMT now this!! Dont they know we have a short time to make our money for the year lets get it together please!!

[JohnH]

I had one call about it today

And I expect more to come in next week. No big deal - it raises clients' awareness of tax matters in general and gets them thinking about this year's return. Maybe some of them will get their info together earlier. I'm going to compose an email about it to send to anyone who asks. I see it as another way to capture some more client email addresses.

As for the proposal itself, President Bush's public statement about it is a trial balloon designed to get the conversation started and to get him & the Republican Party out in front on the issue. He has effectively co-opted the Democrats from claiming credit for it, and they will likely get the blame if nothing passes. I'm not saying that's good or bad - it's just the way politics is done. There's no way to know what the final version will look like after it's been through the Washington sausage machine.

Whatever happens, it will definitely be a check. Issuing checks is much more costly & time consuming than a rebate or reduction on the return, but this isn't about efficiency. Most people are fickle about things like this. They will hardly notice a reduction in their tax liability, but they will remember a check in the mail. Not a bad thing to have people thinking about when they go to the polls in November.

In any event, anything this bloated government does to return some of the money it has confiscated from us is a good thing as far as I'm concerned. Too bad we can't close the loop by putting Washington on a financial diet at the same time.

[Bees Knees]

Isn't it an "advance" of 2008's refund designed to stimulate the economy now? $300 was bad enough, give an advance of $1600 to a couple that normally would receive a refund of say $500 aren't they potentially going to end up owing $1,100 when they file in 2009?


I hear it already - come into Furniture and Appliance and spend your advance before your get it da da da da da.......................

Who says it has to be for 2008?

Why not do it for 2007? Since we are suppose to be waiting until after Feb 11th anyway.

[Jesse]

..................

In any event, anything this bloated government does to return some of the money it has confiscated from us is a good thing as far as I'm concerned. Too bad we can't close the loop by putting Washington on a financial diet at the same time.

Am I missing something? They are not actually returning any "confiscated money", they are just giving us some of our refund early. Refunded money that could essentially cause a balance due on their next tax return. I have clients that use their refunds as a "savings account" for a vacation, after X-mas bills, property taxes, whatever. They get this check now, they won't have the money later and too many people forget that. They can't even remember they got the check - and spent it!

Who says it has to be for 2008?

Why not do it for 2007? Since we are suppose to be waiting until after Feb 11th anyway.

Bees, don't give them any ideas!

[JohnH]

No Way to Know

Jesse:
There's no way to know right now whether it would be a straight rebate of prior year's taxes paid or a rebate based on an anticipated reduction in the current year's tax liability due to a rate change. As we said, it hasn't yet been through the sausage grinder in Washington.

As for how it affects us, I don't think it makes much difference. If anything passes, people will be getting checks in July - Sept of this year (just prior to election time), with the politicians on both sides screaming that "it wouldn't have happened if hadn't been for ME!". And by next filing season, clients will still be complaining to us that they are paying too much tax or their refund isn't big enough, regardless of how the payment actually worked because they've already spent the money and forgotten the specifics.

I do know that if it causes any addtional paperwork or research for the current or next year's tax filing, I will be charging for the work. And I'll explain to the client that the extra charge is created by the politicians' having handled things in the way they did. Next to getting some of our confiscated money back from the government, the next best thing to do is keep reminding our clients what a bunch of goof-balls we keep sending to Washington (on both sides of the aisle).

[ChEAr$]

I think I understant it now

So the proposal is to do away with the 10% bracket for one year, let's say 2008.

If that is done, 10% of the full bracket is $802.50 for single or MFS; and 10% of
full joint bracket is... $1605.

There's the maximum 800 and 1600 dollar amounts.

Could it be that simple?