Tax Rebates - Earned Income

[Zee]

I'm wondering if the rebate situation will create a flurry of previously unreported SE income from taxpayer's seeking a rebate?

If I understand the rebate situation, if a taxpayer has a minimum of $3000 in earned income they can qualify for a $300 whether they paid taxes, or not.

Doesn't this create an opportunity for fraud?

[KBTS]

Senate Plans

Just saw this article about the Senate having its own plan for the rebates.

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20080128&id=8024968

So much for a quick resolution to this thing.

[Zee]

Just saw this article about the Senate having its own plan for the rebates.

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20080128&id=8024968

So much for a quick resolution to this thing.

So, the beat goes on.... It does seem clear that to be eligible for whatever rebate/refund exists, a return must be filed even if below the filing guidelines. This will result in a lot of very confused people.

[Y2KEA]

A single person with $3000 in net self-employment income will owe $212 in SE tax.
Seems like a lot of effort to hope to $300 back in the furture. Plus the "rebate" is really an advance on next years refund. The $300 you get will be deducted on your 2008 return.

[JohnH]

Unknown at this time

Not sure where you're getting your info, but there's no indication it will be deducted on the 2008 return. Especially since the legislation hasn't even been written yet.

Here's a scoop on how hard our Senators & Representatives are working. Both houses convened at 2:00 today. I suppose it's hard to get up on a Monday morning when you've spent all weekend doing the people's business (or should that be "when doing the people IS your business")

Then I recalled that they have a long day ahead of them - gotta go over to the House tonight to hear the SOTU speech, so they'll be up until 10:00 or so. That means 8 hours of hard work, so it's only natural that they would come in late.

Of course, all this time I thought we were electing salaried professionals and now I find they are just regular old clock-watchers. Do you think they'll be putting in for overtime pay if they have to spend an extra hour or so posturing and preening for the cameras after the speech is over?

[ChEAr$]

Where have I heard that before?

So, the beat goes on.... It does seem clear that to be eligible for whatever rebate/refund exists, a return must be filed even if below the filing guidelines. This will result in a lot of very confused people.

"So the beat goes on....." !

Who do I know who uses that expression?

[Zee]

A single person with $3000 in net self-employment income will owe $212 in SE tax.
Seems like a lot of effort to hope to $300 back in the furture. Plus the "rebate" is really an advance on next years refund. The $300 you get will be deducted on your 2008 return.

That's true if the definition of earned income for this rebate means taxable SE income (which you'd think it does). However, KramBerGold's post is correct the SE tax would be $424, not $212.

But, what if the same person is married with two children? Doesn't that increase the rebate to a minimum of $1200? If so, wouldn't this person net a minimum of $776?

However, where did you read the refund is an "advance" of 2008 taxes that will be deducted on the 2008 return? If correct, that's news to me.

[Zee]

"So the beat goes on....." !

Who do I know who uses that expression?

Beats me! But, I must have heard it someplace. I'm not clever enough to think of such a prolific expression. Who is the originator?

[joanmcq]

At that income level, the $212 of SE tax will be wiped out by EIC. Remember when EIC was just to refund payroll taxes on the working poor until it became a handout for having kids? It still works that way for low level employed people w/no kids. Then they still get the $300 bucks.

Of course, HRB will charge about $280 to do the return....

[Fuzzy Faced Leader]

What I'm mostly confused on is where the AGI is coming from. I read the rebate is from taxes paid in 2007. But since it's coming from the IRS, does this mean from the 2007 Income Tax return? If so, what if it hasn't been filed yet, because of extensions? Or is it based on the 2006 tax return? Or is it based on W-2's, etc. Although I haven't seen it in print, I think there is a high probability of the rebate actually being an advanced return of the payment of the 2008 income taxes. I think I recall this happening in the past.

[Jiggers]

Maybe no SE Tax

Household employee may not get a W-2 from employer if wages are less than $1,500. She can come and in say that she has cleaned homes for 3 people, don't have to give names, and say that she made $1,000 at each one. $3,000. Goes on 1040, line 7, per IRS instructions, and so SE or FICA!

[BP.]

Beats me! But, I must have heard it someplace. I'm not clever enough to think of such a prolific expression. Who is the originator?

Sonny & Cher???

[Kram BergGold]

Do the Math

The SE tax on $3,000 is $424 not $212. So I don't see an issue here.

[Jesse]

The SE tax on $3,000 is $424 not $212. So I don't see an issue here.

If qualifies for EIC, the EIC is $212 so the tax due is $212.

[JG EA]

Sonny & Cher???

Absolutely. I know because the Drum keep pounding rhythm in my brain.