Regarding the "tax stimulus" refund.... (1 Viewer)

[Ronald Epstein]

Most Americans are to receive a $600 stimulus refund next month.

It's too early for me to call my accountant, so I thought I'd
try to get clarification here....

Are we going to be penalized for that refund on next year's
taxes?

In other words, are we getting this refund with no strings
attached or is it merely an advance on next year's taxes where
one might go from owing the Government $100 to $700?

Please, stick to the subject matter in your response without
going into any political discussion.

Thanks.

 

[DaveF]

There is no penalty. This is free money (as free as gov't debt can be).

Next year there will be a federal income tax credit for the amount you received so you are not taxed on it.

EDIT: From the IRS FAQ:

 

[LewB]

Lots of luck with that ...
Ron:
Based on some of your posts (iPhone, Caddy vs Accura) I have a strange feeling that you fall into the same income category that I do.

Turbo Tax told me that I was not going to get anything, based on my income.

[Homer Voice] Stupid Turbo Tax [/Homer Voice]

Having said that, I'm doing OK so it's not really a big deal to me (thankfully)

 

[Ronald Epstein]

Lew,

I am aware that I probably will not get the full amount.

The refund is based on "adjusted income" which I suppose is
what you end up with after deductions and so forth.

I think, however, that the amount you get back lessens after
approx. $75k adjusted income. It probably goes to zero once
you are far above that bracket.

 

[Jay H]

Yeah, I'm not holding my breath, being single and also over the $75k adj. gross income thing, I doubt I'll see a penny of this stimulus package, but I do hope it goes to those folks that really need it.

Jay

 

[LewB]

http://www.bargaineering.com/articles/2008-tax-rebate-stimulus-package-explained.html

 

[Bob Graham]

One area that's still not clear is willit affect your state income tax. I understand that in Missouri there is a bill before the state legislature that would make the Stimulus Package non-taxable. Not sure what the situation is in other states.

 

[John_Bonner]

I am married and my wife has no taxable income.
Is my/our upper limit $75K or $150K? (We filed married jointly).

 

[Joe D]

150K.

 

[drobbins]

Being as this is called a "refund", doesn't that mean that we already paid taxes on it just like our standard tax return? Both federal & state?

 

[Philip Hamm]

It's not a refund. It's a (n egriegeously fiscally irresponsible) handout.

 

[DaveF]

Actually, it's called an "economic stimulus payment" and I think it's more a rebate than a refund. Specifically, it's not a return of overpayment on taxes. So perhaps the states could view it as taxable income. That would cheese people off, though, if they spend their $600 / $1200 (as Uncle Sam wants) and then owe a chunk of taxes on the money they spent later.

I tell you what: as a newer homeowner, I feel that I stimulate the economy plenty already. This cash is going in the bank! But it makes it easier to meet my savings goals for the year, so my wife will be able to buy her bedroom furniture, and so it all works out I guess.

 

[drobbins]

That would be kinda stupid - give someone $600.00 and then take back a portion of it for taxes. Why not just give them $500.00 or what ever and not mess with the hassel?

 

[Zembonez]

I'm in the same boat. "No soup for you"... I guess since we are lucky enough to make a good income, we shouldn't worry.

 

[Justin Lane]

Thank goodness I am married to an underpaid teacher, so we should still get some sort of refund.

I agree that the whole concept makes little sense (how can you get a refund when you paid no taxes to begin with?) but I digress. As long as the government is giving out free money, line me up. Nothing like mortgaging away our children's future for a quick fix today.

J

 

[nolesrule]

The future's already been mortgaged away. What difference does it make at this point?

 

[RickER]

He,he...i am gonna show them. Mine will go right into my savings account!

 

[Blu]

I would have been thrilled if they suspended federal and state taxes on fuel for six months.

 

[MikeM]

It's a bribe.

 

[Steve_Pannell]

The IRS without complications? Now there's a novel concept.