Am I mistaken or is this economic stimulus rebate really an early rebate on 2008 refund in which case next year's refund will be reduced by the amount of this year's rebate? Isn't this similar to 2001 when the tax rates were cut to 10% on first 6,000 or 12,000 of taxable income depending on your filing status?
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Original talk was they were going to eliminate the 10% bracket for 2008 and give that amount to everyone as a rebate now, thus increasing the 2008 tax liability by the rebate.
That plan failed. The one that passed added a new refundable credit for 2008, but then said you will get an advance refund based on your 2007 return assuming the new 2008 credit were to apply for 2007 instead, and any refund recieved based on your 2007 return will reduce the credit when you file your 2008 return. -
True rebate
... and that in turn makes it a true rebate (with a kicker).
You get the rebate simply by virture of having paid tax in prior years, but then you get a second chance at it if you somehow missed out the first time around. And if the conditions change in 2008 that would disqualify the payment, it isn't required to be paid back. Some people will get additional rebate money when they file their 2008 return, but nobody will be harmed by changed circumstances."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Although the credit is for 2008 you must however still file a tax return in 2007 Correct?Comment
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Although the credit is for 2008 you must however still file a tax return in 2007 Correct
That's correct if you want to receive the rebate in the summer of 2008, otherwise you will receive it as part of your refund when you file your 2008 taxes in 2009. File now to get the rebate now. File next year to get it next year.
BonnieComment
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So, if even after all this hype Grandma does not file a return in 2007, she can still file a 2008 return and receive the rebate but in 2009?Comment
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Example
Pls excuse my ignorance. Assume taxpayer gets a 300 rebate this year as part of the Economic Stimulus program. Next year, you prepare taxpayer's 2008 return which provides for a refund of 1,000. How much does the IRS refund: 1,000 or 700? Thank you.Last edited by Greenbriar; 02-25-2008, 06:52 AM.Comment
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$1000
The taxpayer will get $1000. In the credits section of the tax return a new line will be added for this new credit. If the credit you qualify for is the same as the rebate you receive this summer, it will zero out on the tax return and the bottom line of the return will not change.
If by chance you would qualify for more of a credit you will get that additional credit plus your normal refund.
Linda FComment
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Bee Knees - Please Respond
Darn! How did I miss this? If the $6000- $12000 tax bracket isn't going to be reduced to zero, how is this being financed? You're awfully good at finding information that I can't. Please provide a link to your source. Post note. My question was kinda stupid, a tax reduction wouldn't finance a rebate either. Either way, it just a bigger budget deficit, no?Originally posted by Bees Knees View PostLast edited by Zee; 02-26-2008, 04:42 PM.Comment
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Politics 101
Originally posted by Zee View Post
This is an election year. Last fall, you will remember everyone was in a big fight over how we were going to pay for reducing AMT so that 20 million middle income taxpayers would not have their taxes increased.
Eventually, those in favor of tax cuts without paying for them won.
That inspired a new set of give-aways disguised as a stimulus to boast the economy. Since most people do not understand where the federal government gets its money (the feds have a printing press in their basement), they would naturally be in favor of getting an extra $600 / $1,200.
Everyone wanting to win the upcoming elections decided to jump on the give-away bandwagon. Everyone was in favor of giving away $106 billion without figuring out how to pay for it, because anyone who would be stupid enough to be against it would never get re-elected.
Paying for the stimulus checks is something future politicians have to deal with. All anyone cares about now is getting re-elected. Thus, scraping the 10% tax bracket to pay for all of this soon became a non-issue.
If you need more help understand how Congress does things, see this video...
Last edited by Bees Knees; 02-27-2008, 09:42 AM.Comment
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Full circle
So now we've finally come full circle.
The main reason for the rebates has always been to give bragging rights to politicians wearing both jerseys as we move into the Fall. Any economic benefit that may result to the taxpayers is a nice by-product, but secondary to the main purpose of buying votes.
I hate to think of the creative ways everyone running for re-election will spin this thing to try and take full credit for it in the run-up to November. I guess this is what they mean when they go on and on about bi-partisan cooperation."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Video is an eye opener
Wow! If the facts presented in this video are true, it's a real eye opener. I had no idea how little time our representatives actually spent in session. And, I think the pay and retirement benefits are awfully good. Should have been a politician. But, I'd have to learn lying skills.Originally posted by Bees Knees View PostComment
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Recess in Congress
Looks just like our public schools' calendar.
Maybe that's where they got the idea?Last edited by veritas; 02-28-2008, 11:37 PM.Comment
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That is why they always have to announce a special session to finish the business they couldn't finish during their normal working hours.Comment
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