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Regarding the "tax stimulus" refund....


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#1 of 67 OFFLINE   Ronald Epstein

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Posted March 23 2008 - 08:58 PM

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.

Ronald J Epstein
Home Theater Forum co-owner

 

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#2 of 67 OFFLINE   DaveF

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Posted March 23 2008 - 10:56 PM

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:

Quote:
Q. Is my stimulus payment taxable?
A. No. You will not owe tax on your payment when you file your 2008 federal income tax return. But you should keep a copy of the IRS letter you receive later this year listing the amount of your payment. In the event you do not qualify for the full amount this year but you do next year, you will need to have the letter as a record of the amount you previously received.


#3 of 67 OFFLINE   LewB

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Posted March 24 2008 - 12:50 AM

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)

#4 of 67 OFFLINE   Ronald Epstein

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Posted March 24 2008 - 12:55 AM

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.

Ronald J Epstein
Home Theater Forum co-owner

 

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#5 of 67 OFFLINE   Jay H

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Posted March 24 2008 - 01:14 AM

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
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#6 of 67 OFFLINE   LewB

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Posted March 24 2008 - 01:15 AM

http://www.bargainee...-explained.html

Quote:
Singles

Determine Eligibility:
If you earned less than $3,000 - unfortunately you’d get nothing.
If you earned more than $3,000 but paid no taxes, you’d get $300.
If you earned more than $3,000 and paid taxes, you get $600.
If you have children, add $300 per.
Determine Phaseout Reduction:
The phaseout levels begin at $75k and end at $87k, at a reduction of 5% per $1,000 over the lower limit. If you earn above $87k, you’re over and thus get nothing regardless of the math.


#7 of 67 OFFLINE   Bob Graham

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Posted March 24 2008 - 02:24 AM

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.

#8 of 67 OFFLINE   John_Bonner

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Posted March 24 2008 - 04:10 AM

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

#9 of 67 OFFLINE   Joe D

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Posted March 24 2008 - 04:39 AM

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

150K.

#10 of 67 OFFLINE   drobbins

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Posted March 24 2008 - 05:36 AM

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?

#11 of 67 OFFLINE   Philip Hamm

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Posted March 24 2008 - 08:20 AM

It's not a refund. It's a (n egriegeously fiscally irresponsible) handout.
Philip Hamm
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#12 of 67 OFFLINE   DaveF

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Posted March 24 2008 - 11:11 AM

Quote:
Originally Posted by 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?
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.

#13 of 67 OFFLINE   drobbins

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Posted March 24 2008 - 12:07 PM

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?

#14 of 67 OFFLINE   Zembonez

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Posted March 24 2008 - 12:28 PM

Quote:
Originally Posted by 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

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.
Zembonez "always evolving" HT / Denon AVR 3806 / Denon DVD-1920 / 2 Adcom GFA 545 II / Adcom GFA 535 II / Adcom ACE 515 Line Conditioner / 4 Vintage Advent 6003 / 2 Sonance S624T / Opt Pro Linaeum Center - 2 Image Dynamics DVC 12 Subs / 4 Layer Laminated Custom MDF Enclosure / Kimber & Grayson...

#15 of 67 OFFLINE   Justin Lane

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Posted March 24 2008 - 01:08 PM

Quote:
Originally Posted by 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.

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

#16 of 67 OFFLINE   nolesrule

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Posted March 24 2008 - 01:51 PM

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

#17 of 67 OFFLINE   RickER

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Posted March 24 2008 - 01:57 PM

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

#18 of 67 OFFLINE   Blu

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Posted March 24 2008 - 01:59 PM

Quote:
Originally Posted by nolesrule
The future's already been mortgaged away. What difference does it make at this point?

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

#19 of 67 OFFLINE   MikeM

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Posted March 25 2008 - 11:27 PM

Quote:
Originally Posted by Philip Hamm
It's not a refund. It's a (n egriegeously fiscally irresponsible) handout.
It's a bribe.

#20 of 67 OFFLINE   Steve_Pannell

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Posted March 26 2008 - 01:01 AM

Quote:
Originally Posted by 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?

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


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