The big tax-related news everyone is waiting to hear about is the government’s “Economic Stimulus Plan”:

Tax rebate checks will start going out in early May for those who file their tax returns by April 15, 2008 – those who file later will receive their rebates later. They will arrive as a separate check, not as part of a tax refund. If you owe back taxes, the IRS will keep the check and apply the rebate to your balance.

All will need a valid Social Security number and must file a federal tax return to get a rebate.

Rebates for Those Who Paid Taxes
The amount of rebate you receive will depend on your filing status and the amount of income tax you paid in 2007.

• Married taxpayers will get a maximum rebate of $1,200 and singles $600, if they paid at least that much in taxes for 2007. Filers with children under 17 get an extra $300 per child.

• Filers with small income tax liabilities will also get rebates. Married taxpayers who paid $1 or more of tax will get $600 if their income topped $17,500 and single taxpayers will get at least $300 if they made $8,750.

The income thresholds above relate to earned income such as wages and income from self-employment.

Rebates for Those Who Paid No Taxes
Those who don’t pay any income tax can still get a rebate.

• Married taxpayers with at least $3,000 in earned income will get a minimum of $300 plus $300 per child. Singles with $3,000 of earnings will receive $300.

• Seniors and disabled veterans are also eligible for rebates based on their Social Security income and veterans’ disability. However, they must file a tax return to get the rebate. This means that those who draw only Social Security and don’t normally file tax returns must now file a federal tax return to get the benefit.

No Rebates for Dependents and Higher Incomes
Anyone taken as a dependent by another filer will not be eligible for a rebate.

In addition, those with high incomes will not be eligible for a rebate: Rebates will start phasing out at levels of $75,000 adjusted gross income for singles and $150,000 for married taxpayers. Thus, someone at a pin level like Diamond won’t qualify.

Fraud Alert!
Do not respond to any telephone calls or e-mails purportedly from IRS asking for banking or other information so that they can deliver your rebate. IRS does not communicate this way!

Any contacts of this nature will most likely be an attempt at identity theft, and if anyone contacts you in this manner contact your local IRS office!

Joe

Learn more about Joe DePetris, Jr., and IBO tax return preparation and tax issues at IBO Bookkeeping 101.

This article is provided as an educational resource for your guidance, and is strictly informational. It does not constitute legal, accounting, or other professional counsel. Nothing included herein implies a recommendation by the author, the IBOA International, or Quixtar, of any course or method of regulatory compliance. Readers and users who intend to take, or refrain from taking, any action based on information contained herein should first consult with their qualified tax advisor, preferably a C.P.A., or appropriate regulatory authorities.