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)
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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.
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.
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…
AN HD TV BABY!
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.
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?
i could care less about weather or not this will help the economy. i know for a fact it will help ME though!
So will people who have a kid in 2008 get an extra $300 retroactively?
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.
@Snarkysnake: I think that pretty much says it, yes.
@legotech: Toyota Pious? That is an apt misspelling if I ever saw one
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?
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…”
Student Loans, just like this year’s return.
$600 on Green “00″.
Agh, didn’t mean to submit.
I’m just playing, I don’t gamble.
I might get a PS3.
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.
@humphrmi: But this isn’t a “refund” it’s a “rebate”. So there.
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?!?!?!??!?!?!
i’m sending my cat on a long overdue vacation to cancun.
I’ll cash mine and put the $100 bills in an envelope in my lock box. That should screw up the whole system!
@Hambriq: hopefully you have someone to stay with, or that $600 will go to three nights in a hotel.
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.
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.
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.
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!
@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.
@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.
@youbastid: Whoops, 2008 tax benefit.
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.
@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.
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.
@DROPBEARCHARLIE
Mine are going toward the $600 “theives kit” to steal the $10,000 cigar.
.
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!
Hookers and blow. I mean bananas and … um I mean student loans. Yeah, that’s it. Loans.
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?
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.
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.
Paying back the disorderly conduct fine I got the other day.
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?
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.)
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!
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.
@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.
@DropBearCharlie:
Awesome Futurama reference. Sucks that the show isn’t on anymore…
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?
I’m going to get it exchanged for Euros, and save it for my next trip to Germany.
With my $110k in student loans, it will take a lot more than $600 to stimulate me to do anything.
It’s going in my savings account. Sadly in my HSBC online savings, 3.55%. How I miss the days of 5.05%.
It’s going directly into my savings. I have a hard enough time making a living or affording even healthcare.