$600 Rebates Are A Tax Credit Advance

UPDATE: Stimulus Checks Will Not Cut Into Your Rebate

Those $600 rebate checks about to spew forth from the Treasury as part of a $168 billion economic stimulus plan are an advance on a 2008 tax credit. We explain how this works after the jump.

Who Is Eligible?
Anyone who files a 2007 tax return with an adjusted gross income between $3,000 and $87,000. The limits are twice as high for couples filing jointly. Since the rebate is tied to your tax return, your rebate will be delayed if you file for an extension, so get your documents in order by April 15.

How Much Is The Rebate Worth?
The rebate is initially worth $300, but rises to match the tax you owe up to $600. Couples filing jointly get twice as much, up to $1,200. The rebate’s value decreases by $50 for every $1,000 earned above $75,000.

What Exactly Is Being Rebated?
Congress implemented a one-time tax cut for income earned in 2008. Rather than delay the benefit of that cut until you file your tax returns in 2009, Congress is giving you the money now.

What Happens If I’m Not Eligible This Year?
If you don’t qualify now (either your AGI is below $3,000 or above $87,000,) but do qualify next year, you can still claim the credit when you file your returns for 2008. If you qualify this year, but not next year, congratulations, you win, enjoy your free money.

Great! What Should I Do With My Rebate?
The government wants you to immediately inject your rebate into the economy by buying all those delicious consumables we love to write about. Saving or paying back student loans is not what they have in mind.

How Will the Economic Stimulus Tax Rebate Affect 2008 Tax Returns? [Consumerism Commentary]
(Photo: EricGjerde)

Comments

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  1. Hambriq says:

    I’ve already decided I’m going to blow through my 600.

    Boston, here I come!

  2. Myotheralt says:

    I’m confused, is this a good thing?

  3. BuriedCaesar says:

    New HDTV. Yeah. That’s it. Or not. Maybe replace the fence in the back yard. Or pay off a credit card. Or not. Then again, 135 bags of Cheetos is appealing.

  4. DropBearCharlie says:

    My tricky dick fun bills are going towards 200 cups of coffee!

  5. juri squared says:

    Wow, what a letdown. It goes from “free money” to “hey, we’re sending you your rebate early!” but nobody’s reporting on that. It’s going to be a sad country come rebate time next year.

  6. legotech says:

    Well, since its not actually free money, just an advance on money they will owe me anyway…I’ll put it in savings for my down payment on the Toyota Pious I want

  7. mikeunwired says:

    I’ll never see mine cause my wife will spirit it away before the check ever gets to me. If I did get it, I’d buy a couple of boxes of really nice cigars.

  8. Ayo says:

    Well I’ve got news for em… I’m paying of the only debt I have, and its the leftovers of a student loan. Muhahahaha.

  9. emilayohead says:

    The government is going to hate this one, but I’m going to use it on my long-awaited trip to Europe, where I will need the extra money to combat such a ridiculous exchange rate. Do you think they would send me the money in euros? :)

  10. hypnotik_jello says:

    Vegas baby, Vegas! Ehh, too bad I don’t qualify.

  11. Jaysyn was banned for: http://consumerist.com/5032912/the-subprime-meltdown-will-be-nothing-compared-to-the-prime-meltdown#c7042646 says:

    I will be spending mine on illegal, non-taxable drugs mostly. :D

  12. godawgs7 says:

    i know people have asked this before, but how in the world do you fold the bill like that?!

  13. Half Beast says:

    Part car repair. Part vacation.

  14. Um, beer. Lots and lots of beer. Good beer. Tasty beer. Yum.

  15. humphrmi says:

    Two working adults and three kids… I’m all in for $2100. We’re planning a family road trip cross-country this summer. Just what the government wants, spending it in dribs and drabs at tee-pee motels along Route 66.

  16. wildness says:

    I’m going to pay off some back taxes.

  17. Wrathos says:

    Yeah, I’m still on my quest to get debt free, so anything – even a cash advance on my rebate – is “found money” and goes straight towards the balance. No Prada bag for me, thanks.

  18. mantari says:

    I’m going to make a robot. A boy robot.

  19. speedwell (propagandist and secular snarkist) says:

    I haven;’t decided, but I will not spend it on consumables. There’s a piece of land near my fiance’s mom’s place that I think I can pick up for the overdue taxes. Failing that, I’ll probably pick up some silver coins.

  20. AT203 says:

    I didn’t understand any of that, any links to a simpler explanation? Is it a check that is getting sent out to past tax-filers, or is it a deduction/forgiveness for tax liability?

  21. ger-hardt says:

    Paying off my wifes pre-marrige credit card dept here.
    (I had student loans to pay for college… she had credit cards… and to think she is the smart one…)

  22. Sherryness says:

    Mine is going towards my moving back to Seattle from the Midwest. I plan to travel starting May 31st, so the return comes just in time! Will go right back into the economy, since moves are expensive!

  23. ekoshyun says:

    Rent for one month.

  24. Rando says:

    I’m putting mine into a savings account as a big ‘fuck you’ to Bush and co.

  25. The Cynical Librarian says:

    I will give a quick thank you to the government.
    However, I will be sending my check straight into the last of our credit card debt. Maybe I’ll save 50 bucks and buy a Wii game.
    Does this remind anyone else of a commercial where they have a $300 refund for signing up for a packaged service. They ask everyone what they would do with an extra $300 and everyone just starts spouting nonsense beginning with a seemingly stoned stereotype of a girl vacantly spouting “Some really awesome concert tickets” and capped by some frat boy yelling half-heartedly “HELLO MP3 PLAYER!”. Ugh…

  26. Feminist Whore says:

    I’m blowing mine on drugs and gambling.

  27. reviarg says:

    @DropBearCharlie: Forget the coffee, I want shiny pebbles, art, and junk parts of animals. On second thought maybe I’ll buy turkey dogs for my friends.

  28. nequam says:

    @jurijuri: @legotech: You misunderstand. It is an advance on an ADDITIONAL credit.

  29. lyndyn says:

    Since I’m actually graduating in August, a chunk of it is going to a party. The rest – yep, you guessed it, student loans. My 2007 tax return will finish off the last of my credit card and medical debt.

  30. ceriphim says:

    Hmm, pretty sure I tried something similar before, I think it went like this:

    Use this paycheck for next month’s rent or to get drunk right now…?

    Side note: I was bummed when it came time to pay the rent. By the government’s logic, however, I was doing the right thing. Isn’t it fun to be 18 and irresponsible, but also in charge of 400 million Americans?

  31. tedyc03 says:

    Lyndyn is right. This is an extra credit for 2008 only. They’re just writing you a check now.

    Your taxes don’t go up at all as a result of this credit.

  32. ClayS says:

    “Saving or paying back student loans is not what they have in mind.”

    Not really true. Saving the rebate, by putting it into a bank or equity investments serves to boost the economy as well. Repaying debt to a lender makes that amount of capital available to others for business expansion, etc.

  33. wring says:

    ROAD TRIP!!!

  34. ideagirl says:

    I don’t want an advance on my 2008 “refund.” Every year I have to do a major song and dance just to get a “refund.” This will just make it that much harder. And if I did want to borrow money, it wouldn’t be from the govt. So this will go into a money market account until I do our 2008 taxes, just in case I have to give it back.

  35. leejames says:

    60,000 penny gumballs!!!!

  36. ChapstickAddict says:

    I will finally be starting my Roth IRA. WooHoo long-term savings!

  37. ophmarketing says:

    I’m just glad this “minor” detail is finally getting out. I’ve been saying it from the beginning (as it’s essentially the same crap BushCo pulled a few years ago), but everyone kept saying ‘oh no, no..this is a bonus ON TOP of your tax refund.

    Well, to all of those nay sayers, I say ‘bite me.’ This check goes right into savings, which is where next year’s tax refund-a refund which will now be $1800 smaller-would have gone.

  38. sunchief32 says:

    I am buying a little bit of gold.

  39. ClayS says:

    @ideagirl:

    It actually isn’t an advance on your 2008 “refund”. It is an advance on your 2008 tax credit that was just instituted. Rather than having you wait a year (until after the 2008 tax year), they are giving it to you now so it will benefit you and the economy sooner. Whether this will be enough to head off or minimize a potential recession, I don’t really know.

  40. MissPinkKate says:

    I will be putting mine into my savings account, where it will either be used to pad my emergency account or to pay for a trip somewhere (probably from NY to FL to visit my family).

  41. evslin says:

    I won’t have any debts left to pay off come the end of the month anyway, so the rebate will either be going into savings with the bulk of my paychecks or I’ll get my truck fixed up or something.

  42. forgottenpassword says:

    ugh! So my idea of putting it in the bank was a good idea. Least I’ll earn a tad bit of interest on it before tax time.

  43. youbastid says:

    This isn’t very good reporting…You’ve got 80% of the people in here thinking that the headline means people will get $600 less back (or owe $600 more) next year because of this, and that’s just not the case. In fact, it works to most people’s advantage.

  44. utensil42 says:

    I will put most of it into my retirement savings accounts and mutual funds. A tiny bit will go to buy yarn for knitting, perhaps the ultimate form of anti-consumerist entertainment (or at least it would be if I spun the yarn myself from fiber I grew or raised myself).

  45. tootingbec says:

    Would somebody please explain to me again how it helps the U.S. economy for everyone to go out and buy more stuff made in China.

  46. CaptainSemantics says:

    I just started back at school this year, and had to take out loans. I may not have graduated yet, but I’m sure as hell going to start paying off my unsubsidized loan.

    What’s I’m not sure about is if I’m getting $300 or $600. I probably won’t have to pay taxes this year (maybe about $50 or so, damn me for not saving enough of my 1099 work), so does that mean I get $300? (scratches head)

  47. chilled says:

    what a confusing post!this has nothing to do with 08 taxes except getting it into next years tax code..make everything fucking hard for gods sake…spend the money and shut up!!

  48. borednowtoo says:

    It’s going straight into my home repair and improvement fund. December was a bad month for things breaking, so it will be nice to toss this in there and get it back up to size faster.

  49. savdavid says:

    Has Bush done ANYTHING good for America? I am really at a loss to think of one positive thing.

  50. HawkWolf says:

    I just used my tax refund this year to pay off some vet bills, so I guess this credit will go into my savings…

    I don’t understand how giving us free money to waste on B.S consumer stuff or to help make a dent in mistake-debt or medical debt is really going to help the economy. wow, 600 dollars. spaying one cat and having the other treated for a mysterious ailment was 600 dollars. no ‘consumer anything’ there.

  51. icntdrv says:

    Screw the government! I’m going to save my money and pay off student loans!

  52. huginn says:

    If you don’t qualify in 2007, but do qualify in 2008, you can still claim the credit when you file your return next year.

    Interesting wording there. Definitely something to help improve the work force for next year. I don’t qualify this year for takes (recent graduate with sub 3k income) but with an expectation for a job next year, this is encouraging.

  53. InThrees says:

    I plan to secure a credit card with the $300 or $600, then after I make proper payments for 6 months I plan to a) apply for more cards and/or b) ask for a limit increase on the first card.

    I will then run up the balances to past the limit and default on them.

    TAKE THAT ECONOMIC STIMULUS PLAN, HERE IS A MICRO CC MELTDOWN.

    Seriously though I’ll probably use it to renew my insurance on my bike or some other mundane and boring thing.

  54. cookmefud says:

    paying off debt and setting some aside for an emergency slush fund.

  55. Yeah, I’m still not clear on a lot of the details. I can’t figure whether I’ll get $300 or $600. I’m not sure what happens in 2008 since I usually end up OWING taxes, not getting a refund. How does that work? Will I have to pay $600 more than usual? Because that’s not cool at all.

  56. florab says:

    I plan on donating mine to several groups that are directly working to counter the right wing–a choice organization, an antiwar group, a gltbq rights organization, etc. Then I will send a nice letter to GWB thanking him for his kind donations to these causes.

  57. Anonymous says:

    i just filed my taxes this week and i owe like $1500. how does this work for me? do i get a check coming? do i owe less? how can i find out? any help would be greatly appreciated.

  58. wallspray says:

    @youbastid:
    Agreed, this is terrible reporting. Most people seem to be confused and rightfully so with that writing. I understand the stimulus plan, and this writing is now making me confused.

  59. Ok. Ok. I have an admittedly stupid, or maybe just lazy question. Either way I am more interested in the answer than am I am concerned with the momentary indignity of my lazy stupidity.

    How do I get this money from Uncle Sam and into my own grubby little hands? Will this be included in my tax return? Is it sent separately? Have I overlooked this, or is it so impossibly obvious that I missed it?

    I’m going to buy war bonds with mine!

  60. forgottenpassword says:

    @Little Miss Moneybags:

    Prettymuch in the same boat here (except I know I will be getting $600 instead of $300). I pay every year come tax time as well.

  61. hollywood2590 says:

    So if I’m reading this correctly, what basically is happening is that they are sending me a $600 check, but then coming to my house and castrating me. Seriously, WTF does this say. Explain better for those of us who are extremely dense.

  62. nequam says:

    @ophmarketing: Um, you’re confused. It IS extra money. If the plan had not passed, your individual tax liability next year would be $600 more. The timing is confusing you. Can I get a bite ME?

  63. MSUHitman says:

    Help to pay off a credit card with a little over $1000 on it.

  64. parad0x360 says:

    I plan on using it in one of two ways…

    Depending on the size of my tax return i want to pay off either my girlfriends car or her credit cards (we live together), I qualify for EIC so I should have enough to do one or the other with my federal return and combining my state and her federal we should have enough to pay off both.

    If we dont the money i get this summer will go to pay off one or the other.

    If we have both paid off by then, then the money (both of our checks) will go towards a down payment on a new car for me. We should get about combined $1200 or more since I have a kid.

    Which I guess would be what Bush wants…of course current debt is more important so that gets priority, even more so with a recession looming over everyones head. I’d rather go into it debt free then go into it having debt and then spending more money on a car and going deeper into dept… I dont truly need the car. My current one should be fine for another couple years with some minor repair work.

  65. jdjonsson says:

    As far as I could tell, reading the text of the bill, this will NOT be like 2001, and reduce next year’s refund. It is essentially a giveaway. The money comes from the nation’s creditors, probably the Chinese, and our children will have to pay this back with interest someday.

  66. Grrrrrrr, now with two buns made of bacon. says:

    Hmm, I think I’ll go out and buy that $500 P25 compatible police scanner, so that when the economy completely collapses and martial law is declared, I’ll know when the authorities are about to move in.

    @tootingbec: Buying crap made in China allows the Chinese to buy cars and ratchet up manufacturing, which increases demand on world energy markets, which increases the cost of crude oil, which allows Mobil/Exxon to make record multi-billion dollar profits, which allows rich investors to buy another big SUV and fill it with lots of Chinese crap from Wal-Mart…thus completing the circle of life

  67. Grrrrrrr, now with two buns made of bacon. says:

    Does that comment make me look cynical?

  68. lukobe says:

    @tootingbec: How’s the Northern Line? As for your question, sure–made in China, but sold and perhaps shipped in this country, so…

  69. code0 says:

    I’m paying my taxes with this (in a delayed fashion, however). My wife’s previous employer decided not to update her W4 once a new one was turned in. The result was no taxes withheld. $1600 hit in the end..

  70. nequam says:

    @hollywood2590: Let’s say I made $50,000 in 2007 as a single person. If my tax liability is $1000, but I had $2000 withdrawn during the year, I would receive a $1000 refund.

    In 2008, my tax liability under the stimulus plan would be only $400 (1000 taxes – 600 credit), so I would be due a refund of $1600. However, under the stimulus plan, $600 of the $1600 will be paid this year. So next year, my refund will be $1000 (1600-600). This does not change the fact that my tax liability for 2008 is still only $400 (or $600 less than this year).

    Maybe that helps.

  71. hollywood2590 says:

    @nequam: Awesome. That should probably be in the article. Thanks for explaining it to me.

  72. skatanic says:

    “Everyone with an adjusted gross income between $3,000 and $87,000 gets a rebate…” Can someone help me find out if this includes me? I worked part time most of last year and earned a little over $4000. I turned 18 in September (the same month i quit my job), so i earned most of my money as a minor. Also since i am a student and live with my parent, would i be excluded?

  73. HooFoot says:

    @savdavid: Bush gave us the “Do Not Call” list. That’s the only positive thing I’ll give him credit for.

    I’m putting my tax rebate into my IRA. That’s my “fuck you” to the Federal government for pissing away social security funds on the Iraq war.

  74. Illusio26 says:

    Buying an iphone. And then putting the rest into savings.

  75. TeraGram says:

    I’m going to make a lot of phone calls to Washington DC to ream those idiots new assholes for their complete and total lack of fiscal responsibility. Good GOD but what a bunch of shit wits!

    2008’s expected bill for Iraq: $156 BILLION.

    With a current estimated population of 301,139,947 that’s $518.03 from every man, woman and child for this year alone.

    Current National Debt: $9.1 TRILLION.

    That’s $30,218.51 each.

    Some of those folks aren’t earning money, though.

    If you want to weed it down to the population between 15 – 64, that’s 202,360,787 people who owe $770.90 each for Iraq and $44,969.19 for the National Debt.

  76. cynicality says:

    paying down debt.

  77. K-Bo says:

    @skatanic: My guess is the money would go to your parents, since they are probably still claiming you as a dependent.

  78. youbastid says:

    @dwayne_dibbly: That’s a brilliant idea! I was thinking about getting an e-bike, 3 weeks worth of dry rations, a gun, and gallons of water hidden in 20 different places. Do you think there’s a chinese knockoff version of that scanner at Walmart for 324.88? Then I almost would have enough left over if I buy the gun on the black market, and I steal the e-bike (I would have a gun, after all). That is what they had in mind when they planned this thing out, right?

    ;)

  79. Grrrrrrr, now with two buns made of bacon. says:

    @youbastid: Exactly! Oh good, I thought it was just me being angry and cynical.

    Of course, if you bought the gun first, you could just steal everything else, but that really wouldn’t be stimulating the economy :oP

  80. sleepydumbdude says:

    I’m going to use mine on something I wouldn’t normally buy like a good carpet shampooer.

  81. humphrmi says:

    @tootingbec: Look at the business headlines this week. So Wal-Mart only sells cheap Chinese crap, right? But when Wal-Mart’s reported that January sales were down, the stock market tanked.

    As long as an American company (that is, a company listed on an American stock market, which is a lot broader than you might think) reports profits, the economy benefits. It doesn’t really matter who made the crap you purchase.

  82. humphrmi says:

    @TeraGram: It’s a great country, eh? We don’t need to spend ourselves into debt, our government will do it for us! :)

  83. vitonfluorcarbon says:

    Let’s see. I’m gonna take my $1800 and put it in Oil Futures since those seem to be the only thing that is stable. With any luck, a 30% return once gasoline hits $4 a gallon.

    It doesn’t matter if its a Republican or a Democrat. Giving America a Payday Loan is only a band-aid. America needs something different if we want a bright future.

  84. bohemian says:

    I’m paying my back taxes. At least this will save me 8% interest from racking up on that amount for a year by paying it early.

  85. ideagirl says:

    @ClayS: Thanks for clarifying that. However, it seems to me that, if I have to pay it back next year, then it is still a loan. The last time they did this we had to pay it back on the next tax filing. I don’t want them forcing a loan on me, there should be an opt-out or something.

  86. forgottenpassword says:

    @youbastid:

    Dont forget to get into the “infragard” while you can. SO you can indescrimiately kill anyone you deem a “threat” & never be held accountable when martial law breaks out.

    [progressive.org]

  87. xredgambit says:

    I’m just wondering, I am actually at a -3% tax rate, So do I get the monies? Next year (this year really) I will actually be paying some taxes. Maybe.

  88. azntg says:

    I earn just short of the amount where filing beomces necessary, so I plan not to file.

  89. icedcornholio says:

    Let’s recap:

    1. Congress is instituting a one time tax credit for the 2008 tax year. This will be a separate line on your 2008 tax return, kind of like the goofy telephone tax credit in 2006.

    2. This is not an ‘advance refund’ on your 2008 taxes. The tax credit is ‘new’ money.

    3. The Consumerist article needs to be modified…the AGI income number is correct, but that’s for a SINGLE taxpayer. If you’re MFJ (married filing jointly) the adjusted gross income limit doubles.

    4. While everyone enjoys extra money, stuff like this increases the deficit and just makes our economy that much worse. Remember that tax credit you got in 2002? Neither do I. It did NOTHING.

    5. I’m using my rebate to pay off debt. Any time credit card companies can make less money off me, that’s a good thing :).

  90. attmac says:

    I am surprised that H&R Block or one of those other guys has not started a “Get Your Rebate Now!” program. You pay us $2000 later so you can have your $1200 now.

    I’m thinking of buying a high risk mortgage company. Should be worth about $1200 by June!

  91. ClayS says:

    @ideagirl:
    You aren’t going to have to pay it back. Congress effectively cut your 2008 taxes by say $600. They are giving you your money now rather than have you wait a year for it when you file your 2008 taxes (April 15, 2009).

  92. CompletionBackwards says:

    I’ll probably change it into tens, then roll it up with a rubber band.

  93. $20 bucks says you have to pay taxes on this refund next year.

  94. CumaeanSibyl says:

    I was just going to toss it in the general fund and use it for groceries and utility bills. That’s kind of what we do with any extra money that comes our way — we don’t maintain an “emergency fund,” we just make sure that the liquid cash reserves are robust. Tax refund’s going in there too. Maybe I’ll buy a used DVD from Amazon.

  95. LeopardSeal says:

    @DropBearCharlie: I’m interested to see what happens to you after the 200th cup. Futurama references always get a +1 from me.

  96. @forgottenpassword: This article on Yahoo helped me understand things a little more clearly.

    At least now I know I get $600, but I’m still not sure how it affects me since I’ll owe taxes this year and probably will next year, too.

  97. chrisgoh says:

    600 tacos for $600, Yum!

  98. SkyeBlue says:

    The best I can figure, between our State and Federal tax refunds and this “rebate” we will be getting back what equals 1/4 of our total income for the ENTIRE year in a short period of time. Oh yeah!

    Other than taking a short weekend vacation with the kids and buying them each a new matress set the REST is going into our “Emergency Fund”.

    If Bush REALLY wants to stimulate the economy he needs to get all his oil company executives buddies to spend their 20 Million $$$$ yearly bonuses!

  99. humphrmi says:

    @ceejeemcbeegee: Tax refunds are non-taxable. It’s a refund of taxes you will have paid, which is money that has already been taxed, hence the word “refund”.

  100. BarryT says:

    The rebate will come just as my phone contract will expire. I’m thinking iPhone.

  101. smitty1123 says:

    It’s going to my credit card, and should be my last payment on it. So, no more credit card payments means I’ll have more of a disposable income. Win win for me.

  102. sarsbar says:

    I spent about three years using most of my disposable income to pay down about $10k in credit card debt I’d incurred while helping the economy after 9/11, mostly by living off credit, buying stupid shit I didn’t need, and of course, plenty for the food service industry. The $600 ought to kill the last of it. (In short: It’ll just about cover the LAST time I stimulated the economy.)

    As far as I’m concerned, as a consumer, my only debts are to Visa and my mortgage company… not to society.

  103. Snarkysnake says:

    So you mean the cynical, oily politicians that stopped committing adultery long enough to vote for this are just RENTING our votes in this fall’s election ? Lets do this again in 2012 ,2016 ,2020…

  104. frankblevins says:

    AN HD TV BABY!

  105. it’ll go to my “buy a car when the current lease is up in November” fund. this small “rebate” or whatever is a drop in the ocean. we’re still fucked. oh sure there will be a tiny positive blip from it once the proles get their checks and go blow it at Wal-mart, but c’mon.

  106. I’ve already decided to use the money back to pay my bankruptcy lawyer. ha. Actually the family and I are going to put it in our savings acct and use it on our home purchase we’re planning on making this winter.
    So much for stimulating the economy with the spending. Damn us savers! Don’t we know we need to consume for our country. It’s the patriotic thing to do. You know who is a saver? Osama.
    Anyway, why should it surprise anyone that they money the government is giving us was previously taken from us or may effect what they will give us in the future? Where exactly do people think the money comes from? Oh, right, those plastic cards the nice banks send to you. No consequences eh?

  107. snoop-blog says:

    i could care less about weather or not this will help the economy. i know for a fact it will help ME though!

  108. SpenceMan01 says:

    So will people who have a kid in 2008 get an extra $300 retroactively?

  109. deb35802 says:

    I’m going to stick most if not all of it in savings.

    There is a leather bound bible that I want and rather than waiting for it to go on sale I may go ahead and pay the full price instead.

  110. @Snarkysnake: I think that pretty much says it, yes.

  111. cmdr.sass says:

    @legotech: Toyota Pious? That is an apt misspelling if I ever saw one :)

  112. Catperson says:

    I’m confused. I get all of my taxes back b/c my husband and I are in school and we make almost nothing. All of my taxes equal about $600. So does that mean I basically won’t get anything back on my 2008 return?

  113. DigitalMariner says:

    This sound exactly like an episode of The West Wing when the President’s aide Charlie was doing his taxes and looking forward to buying a new DVD player with his refund, but ended up owing money. A funny exchange ensues about how he spent the “rebate” on paying down debt (rather than the eating out for dinner, as they would have liked) and that it isn’t a rebate so much as a loan.

    When President Bush’s plan came out, this is was the first thing that came to mind. When I read this article to my wife and told my West Wing story she replied “maybe that’s where he got the idea from…”

  114. ciaright says:

    Student Loans, just like this year’s return.

  115. nemesiscw says:

    $600 on Green “00”.

  116. nemesiscw says:

    Agh, didn’t mean to submit.
    I’m just playing, I don’t gamble.
    I might get a PS3.

  117. StevieD says:

    I will spend it on wasteful things. In reality it will free up my regular $ to spend on wasteful things. But the difference is the same. The $ will just be used to purchase stuff I don’t really need or want.

    Oh sure I, like others, will claim I invested it. Others will claim they bought useful, really needed things.

    But in reality the $ will be spent on wasteful things.

    Oh what fun it is spend in the USA.

  118. @humphrmi: But this isn’t a “refund” it’s a “rebate”. So there.

  119. DeltaPurser says:

    So, basically they are giving me the money I will be owed in 2008 NOW, rather than next year? This means that if I’m due $700 next year, I only get $100? If so, I’d be better off having NO taxes taken out of my paycheck next year, to ensure I don’t get a refund?!?!?!??!?!?!

  120. yesteryear says:

    i’m sending my cat on a long overdue vacation to cancun.

  121. Me - now with more humidity says:

    I’ll cash mine and put the $100 bills in an envelope in my lock box. That should screw up the whole system!

  122. KogeLiz says:

    @Hambriq: hopefully you have someone to stay with, or that $600 will go to three nights in a hotel.

  123. Mr. Gunn says:

    jurijuri: “It’s going to be a sad country come rebate time next year.”

    Yeah, but then another possibly Democratic administration will be in power so everyone will blame them. And, as they hope, re-elect a Republican to “fix” things in 2012.

  124. geolojoines says:

    This is interesting to know. I guess it truly is a “pay now or pay later” situation. More optimistically, I guess it beats a payday advance loan.

  125. Erwos says:

    Given the current state of the banks, I don’t think anyone’s going to be extra sad if you save your money, either.

    As for me, I dunno. Maybe a used PS3 if Blu-Ray wins out. I’ll probably save the rest.

  126. evilmregg says:

    I’ll be using the money to pay off some of my debt, for sure. The question is, which debt? Credit cards, student loans, car loan… so many choices!

  127. AD8BC says:

    @icedcornholio: Good points, I was upset with the reporting on this article as well.

    Except I do remember my last rebate check. I used it towards a car that I still own.

  128. youbastid says:

    @DeltaPurser: No. It is an advance on the $600 tax credit you’ll get next year. Meaning, if you get it now, you won’t get an extra $600 next year. You won’t get $600 less than normal, you won’t owe $600 more. It’s a 2009 tax benefit. They’re giving you the advance on it now.

  129. youbastid says:

    @youbastid: Whoops, 2008 tax benefit.

  130. jessemoya says:

    TAXES. Get this: I’ll be using my FEDERAL tax rebate to pay my STATE taxes!

    I just moved to MA and they’re demanding an excise tax for my car. I’d be angry if the irony didn’t tickle me so.

  131. tootingbec says:

    @humphrmi: Well, it’s just that Wal-Mart’s profit margins are already infinitesimal. That’s basically their business model. Same way for the whole retail economy these days: as little as possible of the revenue generated at the till stays in the States.

  132. SweetAtheist says:

    Well, I guess nothing is “free” is it? I wish it was enough to buy a ticket to paradise, but not in this day and age… Maybe a new shower curtain and bedding.

  133. zabaat says:

    @DROPBEARCHARLIE
    Mine are going toward the $600 “theives kit” to steal the $10,000 cigar.

  134. chandler in lasvegas says:

    .
    I am going to deposit it to my eBay account and buy a bunch of stuff from Europe not available in the USA. That way I can send my rebate to countries that know how to manage money. Three bottles of Absinthe, come to daddy!

  135. Spaztrick says:

    Hookers and blow. I mean bananas and … um I mean student loans. Yeah, that’s it. Loans.

  136. IssaGoodDay says:

    So – my tax liability for this year is $0 since I am a student and paid a crapload of money in tuition. I am getting ALL the taxes that they took out of my paychecks (about $1400 worth) back. Does this now mean that I will be getting $2000 instead?

  137. PracticalMagic says:

    Hmmmmmmm…….you know how you enter into a contract the second you sign a check? I wonder what would happen if you just simply did NOT endorse the check, and never took the money. That’s got me curious.

  138. PracticalMagic says:

    Hmmmmmm…..You know how you enter into a contract just by endorsing a check? I wonder what would happen to your taxes for 2008 or 2009 if you never endorsed the check, and never took the money. Makes me really curious. In case this mess. shows up twice, I hit submit and it disappeared, so I typed it again.

  139. reasonsnotrules says:

    Paying back the disorderly conduct fine I got the other day.

  140. Man, we need a FAQ for all these questions!

    someone tell me if I have this right, please? So let’s say I don’t owe any money and in fact am getting money back from the govt on taxes this year, a “refund” if you will. Does this mean I get exactly $300 and not a penny more?

  141. vermontwriter says:

    The last time they gave a stimulus like this, I had to claim it on taxes as income. Whether they say it is non-taxable or not, I had to claim it as “income” just like I have to declare my state tax refund as “income” when I do the Schedule A. I’m self-employed and thankfully my accountant had warned me in advance to set aside the usual amount to cover taxes on it.

    I plan to pay off the roof I had to fix last year after a pseudo tornado hit my town. (I say pseudo tornado because while people got pictures of the funnel cloud, the verdict was that it couldn’t have possibly been a tornado in Vermont, so it must have been just strong winds that tore off sections of roofing and uprooted trees.)

  142. Misterplug says:

    So let me see if I’ve got this straight. On top of borrowing money from Social Security, businesses, and other countries, now we’re also borrowing money FROM THE FUTURE?!?

    Who says Bush doesn’t have forward-thinking ideas? Maybe next year we can borrow from the 2009 taxes, and then in 2009 we can borrow from 2010 AND 2011!

  143. rhambus says:

    I just want to remind all the people here that paying off student loans is not a good idea unless you have them at a rate that’s above what you can get on investments. Heck, mine are at 2.1% which is even lower than inflation, so it would be ridiculous to pay them off – they are effectively continuing to loan me money for free at this point. Some people have much higher rates, of course, but you want to make sure that you are doing the fiscally sensible thing. Debt sucks but there is no reason to make yourself worse off by paying low rate debt off too early.

  144. chrisgoh says:

    @chandler in lasvegas: “I am going to deposit it to my eBay account and buy a bunch of stuff from Europe not available in the USA. That way I can send my rebate to countries that know how to manage money. Three bottles of Absinthe, come to daddy!”

    Real Absinthe is now available in the US. Look up Lucid. I bought some last week.

  145. FearlessUser says:

    @DropBearCharlie:
    Awesome Futurama reference. Sucks that the show isn’t on anymore…

  146. bubby1124 says:

    I got this off the internets….

    Most workers – those who will pay at least $600 in federal taxes for 2007 – would receive a $600 rebate if they filed individually and $1,200 if they filed a joint return. Unlike a similar stimulus program in 2001, the money is an outright payment, not an advance or offset against the next year’s tax filing.

    So who is right?

  147. Sure I could agree with you, but then we'd BOTH be wrong. says:

    I’m going to get it exchanged for Euros, and save it for my next trip to Germany.

  148. mwshook says:

    With my $110k in student loans, it will take a lot more than $600 to stimulate me to do anything.

  149. LVP says:

    It’s going in my savings account. Sadly in my HSBC online savings, 3.55%. How I miss the days of 5.05%.

  150. juanguapo says:

    It’s going directly into my savings. I have a hard enough time making a living or affording even healthcare.

  151. BStu says:

    This happened to me the last time they did the rebate. I didn’t qualify initially because I had been a dependant the previous tax cycle, but I was out of college that entire year so I got the rebate on my tax return the next year.

  152. rjhiggins says:

    This post has done nothing to clear things up. Now you have people thinking this will come off next year’s REFUND, which of course isn’t the case.

    Try again please.

  153. rjhiggins says:

    @icedcornholio: Thank you for clearing things up. Consumerist should replace its long, convoluted post with your simple explanation.

  154. ogman says:

    No frivolous spending here…it will go to debt reduction.

  155. BlackBirdTA says:

    So if I put mine in my Health Savings Account, would that be something like “investing” (actually paying less tax?) I get money back this year and can then deduct it next year from my income? It would go back into the economy eventually through medical costs. Yeah, this should be a fun tax year!

  156. rjhiggins says:

    @ophmarketing: And you’ve been wrong all along. And Carey is wrong as well in her explanation. It is indeed new money; that’s why it will add billions more to the federal deficit.

    The only “advance” part of it is that the rebate (NOT refund) comes off next year’s taxes, but you get the cash this year.

  157. PeteRR says:

    I’m probably going to get my truck repainted. I’d planned on doing it anyway. The 600 crows will be the deposit on the job.

  158. meneye says:

    while this whole thing is a stupid move by the government, I just cant say ‘no’ to free money.

  159. taka2k7 says:

    @chilled: Yeah, it isn’t written so well, I had to read it a couple of times to understand it… but that’s taxes for you.

    Me, I’m getting $2100. $1K for baby’s 529 and the rest in emergency fund. Wife’s student loan is 0% interest, so no hurry in paying that off.

  160. ladydisdain says:

    I’m donating it to Obama’s campaign.

  161. delicatedisarray says:

    And mine will go towards paying back my student loans. Screw what they have in mind.

  162. kbarrett says:

    I’ll buy a new Evil Black Rifle and a 40 oz malt liquor.

  163. this will make my truck loan 2 months shorter.

    woo.

  164. Raignn says:

    My husband and I have no debt (except student loans) so this will go into our already large savings. We’ll probably use it for our trip to Albania this summer. Oops, guess we’re not helping ‘stimulate’ our economy!

  165. Amsterdaam says:

    I’m spending mine in Amsterdam. I know, I’m a prick.

  166. S-the-K says:

    @DROPBEARCHARLIE: LMAO! I’m going to swim with Mushu the pygmy killer whale with my tricky dick fun bill. (“Barf, Mushu! Barf like a Freshman!”)

    Sorry, had a Futurama flashback.

    So, it’s not an actual tax cut, like the $300 we got a few years ago? It’s just an advance on the taxes we were going to pay anyway? That’s even more reason to use it to pay down debt or put in the bank. The government’s going to get it back sooner or later.

  167. Saboth says:

    Sooooo next year, my refund will be less the amount they are sending me this year? Basically it is sort of like a government loan that I pay off with my 2008 tax refund? Meaning…if I usually get back $300 each year, next year I will get back $0?

  168. DashTheHand says:

    Sorry Government, I have all the stuff I want. See ya at the bank.

  169. DoubleEcho says:

    My wife is going on a “girlcation” with my sister for a few days with her half, and I’m using my half (and the remains from our Federal tax rebate after I pay off my credit card) to insulate and finish our attic, and maybe buy new front door too (Hello energy credit!).

  170. mobilene says:

    Sorry, Federal Gov’t., but I will be paying down debt with mine.

  171. Starfury says:

    The rebate will partially pay for new pipes in my house. I’m a bit tired of rust chunks clogging the hot water lines and low water pressure. It will get spent, just not the way the govt. would like.

  172. vladthepaler says:

    I’ll spend it in Canada, where a dollar is actually worth something.

  173. toddkravos says:

    So, I’m moving to a new residence next week.

    How do I ensure I get my check at my new residence?

  174. toddkravos says:

    Oops.. hit enter too fast…

    I’ve already done my 2007 taxes, which I already got my refund.

    I’ll be putting my rebate check in the same savings account I put the 2007 federal and state tax refunds.

  175. gopher646 says:

    I’ll be one of the few that actually puts it away in savings and doesn’t spend it right away.

    There goes their entire plan.

  176. etinterrapax says:

    Paying off debt. It’s what we would have done if we’d gotten the money a year from now. Being debt-free will do more to help our household economy than any efforts on the part of the government.

  177. DeltaPurser says:

    @youbastid: Thanks for that explanation… The way I had it in my mind didn’t make any sense whatsoever, so this way it kinda’ does…

  178. Wormfather says:

    What would I do if I had $600? I reckon I’d do two girls at the same time….

  179. hi says:

    @ HUMPHRMI – hence the word “refund”.

    Try… hence the word “tax credit advance”.

    You can get an advance from the bank or a check cashing place. Do you have to pay those back? Yes you do. Pay attention. People will owe money on this next year as it is borrowed money.

  180. tande says:

    @hi: No, it isn’t.
    You can’t draw a parallel to a bank or check cashing place because it isn’t the same thing at all. Just because both might use the word advance doesn’t mean they are the same kind of advance.

    This is an advance on a credit that you would take when you file in 2008. I’m not paying anything back or losing anything with it. Its win win. If you don’t qualify in 2008 you still get the money in 2007 don’t have to “pay it back” in 2008. If you qualify for more in 2008 you’ll actually get the additional money.

    I was thinking HDTV for mine too.

    I went and looked the other day though and couldn’t really find one that had everything I wanted that was a name I’d trust. We’ll see what they’ve got to offer in May.

  181. missbheave (is not convinced) says:

    Straight in the bank. With the economy in the shit I need an emergency fund like never before.

  182. missbheave (is not convinced) says:

    @ladydisdain: NICE!

  183. theblackdog says:

    No soul-eating Tax Cat photo for this entry?

    I don’t think that they’re going to like that my rebate will be going towards my credit card.

  184. hi says:

    @Tande

    It goes into the national debt which we all are paying back with our income taxes. All U.S. dollars are borrowed from the federal reserve with interest. And yes you and everyone else will be paying it back… it’s what we live for apparently.

  185. yetiwisdom says:

    Donate it to the ACLU, Cato Institute, Ron Paul or maybe the EFF… such delicious irony.

  186. dsgnomite says:

    Hoe stroll here I come. Better not see you nekkid on rebate day!

  187. jdmba says:

    Not clear why people would be surprised that it’s just an advance. The last time they did this, it was the same thing.

  188. josh42042 says:

    500 cups of coffee!

  189. Anonymous says:

    I am trying to find out if I need to pay taxes this year on the rebate check we received last year. I did not find it here, but I found another site that talks about it, so I thought I could share it here for others. This site http://www.maxi-pedia.com/how+to+tax+economic+stimulus+rebate+check that I have in my other window which says no. The article behind the link says that no need to tax it, that the rebate which we received last year was only an advance of a tax credit that we calculate on this years tax return.