Tax Rebate

[BOB W]

http://www.boston.com/news/nation/washington/articles/2008/01/24/deal_reached_on_tax_rebates_for_stimulus/?p1=Well_MostPop_Emailed3

[sea-tax]

All I can say is Wonderful!

[JoshinNC]

I want specifics on the business side

The article references 50% expensing of plant and capital equipment. Is there a cap? Is this an expansion of Sec. 179?

I assume this will have to entered as a House bill sometime today or tomorrow. Maybe then we'll be able to review the actual proposal.

BTW, get ready to buy a flat screen with that $1200 check (cause mine is going in my ROTH and it could sure use the bump that all this spending is supposed to create!).

[Mike Mac]

Has anyone seen actual bill yet??

Everything I have heard or read about the economic stimulus package refers to "wage earners" or "earned" income when discussing who is eligible for the funds. I have got many clients who are retired and the vast majority of their income is from pensions and/or investments. I can't imagine that the politicians would not include retiree's in an election year.

I searched for an actual bill but was unable to locate one as of this morning. If someone sees it could they post a link on the board??

Thanks

[oceanlovin'ea]

Rebate or advance on refund?

I have been asked this by several people. From what I read earlier I thought it was like before when we had to ask people if they got the check in the summer.

Just thinking of the term "rebate", you usually have to buy something to get a rebate. So does this mean that the rebate is an advance on their tax refund?

Hope someone understand this better than I do. Actually I have been so busy with payroll reports and W-2's I haven't had time to listen to the news much or read the paper.

Linda F

[Redneck]

First checks

are estimated to be out 1st week of May. So much for the fast fix to the economy.

http://www.nola.com/news/t-p/frontpage/index.ssf?/base/news-10/120124267954800.xml&coll=1

[oceanlovin'ea]

Thanks

Redneck. That is the most easy to understand article I have seen yet.

Linda F

[JohnH]

Rebate (or what)

Linda:
I think it will be a rebate.

We did buy something.
We bought some very expensive and inefficient government services with our tax payments and now some of the purchase price is being refunded. Not enough to right the wrong, but at least a little of it is coming back to us.

In my view, the government isn't giving us anything that was not already ours in the first place. They just wield the power to confiscate it from us in whatever quantity they think they can get away with. It isn't as though the Government is getting a "second job" to earn the money to give us.

[dsi]

JohnH identified the truth on this one.

[DaveO]

We get the government we deserve

Just be thankful we don't get all the government we pay for.

[Mike Mac]

Looks like retirees may be excluded

The following is taken from the article that Redneck sent as a link:

"Q: You said most. Who is eligible?

A: To get the maximum $600 or $1,200 payment, people must have paid federal income taxes in 2007 and had earned income of at least $3,000.

Those who made at least $3,000 but didn't pay any federal income tax would get $300 per individual or $600 per couple. "

So, if this is an accurate interpretation of the agreement...Retirees who had less than $3,000 of EARNED INCOME would get nothing. But those folks that had higher than $3,000 of EARNED INCOME but still had no tax liability would still get money. Still seems strange that retirees that do have a tax liability due to pension and investment income would get nothing. I am anxious to see an actual bill that gets forwared to the Senate before I start sending messages to my local retirement association to get their lobbying started quickly.

Also...Could there be an opportunity for more income for us with this proposal?? How will the IRS hit the population of "those who made at least $3,000 but didn't pay any federal income tax"? Will we be sending in tax forms for the 2007 season for those that aren't mandated to just to get them a potential rebate??

[jimmcg]

Have no reason to believe it is not the same as the "rebate" in 2001, that is, simply an advance on the reduction in tax rates for 2008 which will be settled up when we file for the year 2008. However so far all involved have been only "blowing smoke.' We will see the details and the truth when the final bill is drafted and signed by our fearless leader.

[JohnH]

Here's a prediction

Prediction - It won't be like the "Advance Payment" we saw last time around. It will be a straight-out check, amount yet to be determined, and earnings threshhold yet to be determined. There won't be any settling-up on next year's tax return. Once it's paid out, that will be then end of it.

Why do I say this? Because this is an election year.

Everbody is piling on so they can claim credit for it on both sides of the aisle. We're going to be inundated in the fall with reminders from both parties of how they "fought for us" and it you wouldn't have gotten your check if it had not been for your particular congressperson's efforts.

The biggest battle is probably going to be over what it will be called and what the letter that announces it will say.

[BOB W]

Prediction - It won't be like the "Advance Payment" we saw last time around. It will be a straight-out check, amount yet to be determined, and earnings threshhold yet to be determined. There won't be any settling-up on next year's tax return. Once it's paid out, that will be then end of it.

Why do I say this? Because this is an election year.

Everbody is piling on so they can claim credit for it on both sides of the aisle. We're going to be inundated in the fall with reminders from both parties of how they "fought for us" and it you wouldn't have gotten your check if it had not been for your particular congressperson's efforts.

The biggest battle is probably going to be over what it will be called and what the letter that announces it will say.

I guess as late filers file their returns they will get a check after it is filed???????

[Jiggers]

Opportunity for fraud!!!!

If you worked as a household employee and made only about $1,200.00 from this one, and $800.00 from another, and $1,000.00 from another and $1,000.00 from another, you do not receive any W-2 from any one because the income is less than $1,500.00 for each one.

You report on line 7 of the 1040 and write in HSH.

Yet your income is $4,000.00. You won't owe any income taxes, you probably qualify for EIC and now you qualify for the rebate because you have earned income of at least $3,000.

Wow, I wonder how many new filers there will be reporting their work as a household employee.

You don't even have to say who you worked for!

Now talk about a due dilligence problem on us preparers next year!