Tentative deal reached on tax rebates

[aida2003]

I still don't understand exactly what this money represents. How will it affect my taxes for 2007 or 2008? I need to know that before I can give any thought as to what to do with the money. If it essentially gets repaid through a tax adjustment later, it can't be spent as it will be needed later.

I'm sure it won't affect our 2007 returns. That year is all gone, but the gov't is sneaky. One of scenarios can be as follows: the economy revives thanks to hand-outs, though I doubt, and at the end of 2008 we'll get a suprise that we must declare rebates as income and due to that some will be tipped over the AMT threshold. But that's just my worst imagination, so pay no attention

How was it with the 2001 rebates? We didn't qualify, so I know nothing.

[negreenfield]

The part I'm curious about is the jumbo mortgage change. Will this only be for new mortgages or is there refinance capabilities? Also, what areas are considered the more expensive areas that will qualify, California, NYC? I'd love to refinance if I can get below 5.5% for 30 years on $450K. I'm comfortable paying my current 2 to avoid the jumbo mortgage but if I can consolidate at a lower rate it seems like a no-brainer.

[jIM_Ohio]

Here are my random thoughts

1) CNN, what I read on the web, and what I saw on a couple other reports suggest to me this is a temporary lowering of tax brackets, or an addition refund in addition to what you already receive.

evidence of this (circumstantial):

a) people are reporting this is deficit spending. If this was an advance of a 2008 tax return, it should not affect the deficit at all, or be considered additional government spending

b) the sources are the more reliable portion of the media

2) morning talk shows on radio had callers saying this was an early tax return for 2007. I doubt too many people really understand taxes enough to even guess at this.

a) this evidence is hearsay at best, and the sources are rednecks in the middle of Ohio.
b) if it's an early tax return, still not a bad thing

3) we have twins due in June. If they come early enough, do I get another $600?

[gackle]

It was just speculation from talk show hosts, but because this is tax season the IRS will be bogged down so we shouldn't expect these rebates until June or July.

[aida2003]

3) we have twins due in June. If they come early enough, do I get another $600?

I might be wrong, but I do not think your kids (congrats!!!) will get anything. My guess is that there rebates are based on 2007 info (income and kids).

[anonymous_saver]

• $600 for singles
• $1,200 for married couples
• $300 for each child (without limit)
• People who earn less than $3,000/year and don't pay taxes would receive $300.
• The rebates would phase out gradually for individuals whose income exceeds $75,000 and couples with incomes over $174,000.
• Individuals with incomes up to $87,000 and couples up to $174,000 would get partial rebates.
• The caps are higher for those with children.

The deal: Billions in tax rebates -- baltimoresun.com I'm not from Baltimore, I just thought their publication did a good job of describing what the rebate would be if it passes on the left side of their website.


Ughhh this rebate makes me so mad. Trust me, I don't want my $600. We have better things to do with this money as a country (i.e., pay down our trillion of dollars worth of debt, etc.). I wish the general public would at least try to think critically about this and not just say "woohoo I have 'free' money".

I'll get off my soapbox though...

[thkgranny]

How was it with the 2001 rebates? We didn't qualify, so I know nothing.

Anyone remember?

[moneybags]

Anyone remember?

If I remember correctly, the 2001 rebate was an advance on your taxes for the next year. I think it was reflected in your tax liability the next year. The net effect being you didn't really get free money. Although there were a few glitches where people did get theirs for "free", I can't remember the exact circumstances.

[sweeps]

What happened was the 15% tax bracket was lowered to 10%, and the amount that resulted from that was $300 or $600. The government sent those out as rebate checks in advance. When you filed your taxes, everyone still used the 15% tax bracket on their tax forms -- otherwise you could have double-dipped and gotten twice the rebate.

[maat55]

Being self-employed, I just use these rebates to pay taxes. It gives me a couple more steps on that darn tax collector chasing me.

[sweeps]

The "economic stimulus" package has passed the House 385-35. Now we'll have to see what the Senate does.

[disneysteve]

I hope it passes!!!

I could really use some fun money!!!

I want a new really nice color printer for the home office and since this is free money I could stop putting it off. I could also use a bigger monitor yep still have the 13 inch one, I hate to replace it while it still works, even though I REALLY REALLY want a bigger one.

I assume you are kidding. No such thing as "free" money. Since it will likely affect next year's taxes, any check we get will be going in the money market account. Since we don't typically get a tax refund, we will probably just end up owing more next year to reflect any "rebate" we received this year. So we won't be helping to stimulate the economy. Sorry Mr. President.

[Aleta]

Steve: This is reflective of the 2007 taxes not 2008. Whatever you get should have nothing to do with 2008 unless you owed taxes in 2007.

[disneysteve]

Steve: This is reflective of the 2007 taxes not 2008. Whatever you get should have nothing to do with 2008 unless you owed taxes in 2007.

Sorry, I'm still confused about where this money is actually coming from. I do expect to owe for 2007 as I don't believe in getting a refund if I can avoid it. So what does that mean? I'll pay my 2007 taxes and then get some of it back? And then not have to repay that money in 2008? In that case, it would be "free" money. That would be nice.

[maat55]

More than likely we will have to show this rebate as income for 2008 and pay tax on it.