The IRS will move fast on tax rebates. The checks will start going out in early May, once the Revenue Service finishes processing returns filed around April 15. Rebates will be keyed to tax liability. Marrieds will get a maximum rebate of $1,200... singles-$600. But there is a catch. You must have had at least some federal income tax liability to receive the refund. More good news, filers with dependents under 17 get $300 per child extra.
Filers with small income tax liabilities will also get rebates. Marrieds paying $1 or more of tax will get at least $600 if their income topped $17,500. Singles will get at least $300 if they made over $8,750.
Even those who don’t pay any income tax can get rebate checks. Marrieds with at least $3,000 of earned income will get a minimum of $600, plus $300 per child. Singles with $3,000 of earnings will receive $300 plus $300 per child. This includes seniors and disabled veterans. For rebate purposes, Social Security benefits and veterans’ disability count as earned income.
But, there is no good news for those people paying high taxes. High-incomers won’t get checks. Rebates will start to phase out at $150,000 of adjusted gross income for couples and $75,000 for singles, falling by $50 for each $1,000 over these amounts. For example, a couple with two children won’t get a rebate if their AGI is $186,000 or more. Nor will anyone who can be taken as a dependent by another filer.
You will have to file a 2007 tax return to get a rebate check, because the rebates will be based on the data shown on 2007 returns. Filing on an extension will delay your check. On your 2008 return, you’ll reconcile your rebates with your 2008 tax situation.
Technically, the rebate is an advance payment of a special 2008 tax credit. For most, the rebate will equal the tax credit allowed. Taxpayers whose credit exceeds their rebate will claim the balance on their 2008 tax return. If your rebate is bigger than the credit, you needn’t repay the Service.
The IRS has a special way to fill out Form 1040A if you need to file just to get the rebate. Go to http://www.irs.gov/ for a copy.
Filers with small income tax liabilities will also get rebates. Marrieds paying $1 or more of tax will get at least $600 if their income topped $17,500. Singles will get at least $300 if they made over $8,750.
Even those who don’t pay any income tax can get rebate checks. Marrieds with at least $3,000 of earned income will get a minimum of $600, plus $300 per child. Singles with $3,000 of earnings will receive $300 plus $300 per child. This includes seniors and disabled veterans. For rebate purposes, Social Security benefits and veterans’ disability count as earned income.
But, there is no good news for those people paying high taxes. High-incomers won’t get checks. Rebates will start to phase out at $150,000 of adjusted gross income for couples and $75,000 for singles, falling by $50 for each $1,000 over these amounts. For example, a couple with two children won’t get a rebate if their AGI is $186,000 or more. Nor will anyone who can be taken as a dependent by another filer.
You will have to file a 2007 tax return to get a rebate check, because the rebates will be based on the data shown on 2007 returns. Filing on an extension will delay your check. On your 2008 return, you’ll reconcile your rebates with your 2008 tax situation.
Technically, the rebate is an advance payment of a special 2008 tax credit. For most, the rebate will equal the tax credit allowed. Taxpayers whose credit exceeds their rebate will claim the balance on their 2008 tax return. If your rebate is bigger than the credit, you needn’t repay the Service.
The IRS has a special way to fill out Form 1040A if you need to file just to get the rebate. Go to http://www.irs.gov/ for a copy.
