IRS Rebate due this summer - Are they really giving us extra money to spend?
By coffeebreak
@coffeebreak (17797)
United States
February 14, 2008 8:19am CST
We have all heard about this huge tax rebate we are being blessed with by the Govt. I now read this and see that it isn't EXTRA they are rebating, it is an ADVANE on what our REFUND will be next year and that has to be reported and then deducted from any refund! Basically they are just giving us next years refund this year! The reason for the rebate was to give money to us all so spend to help the economy...however, it seems to just be a "loan" from next year's taxes to spend now.
Unless I am misunderstanding this article - tell me what you think.
http://finance.yahoo.com/taxes/article/104417/Tax-Rebate-Winners-and-Losers
On page 4 it says:
But filers will have to reconcile any money they receive this year when they file their 2008 returns.
"It harks back to the 2001 situation when we got the new 10 percent bracket and got an advance check for that. Then on next return had to account for it," says Luscombe. "It's expected to be that way this time."
The 2008 tax forms should have a line for the new credit. When calculating taxes next year, taxpayers will have to subtract what they got as a rebate check the previous summer.
"Some people might think that's unfair," says Luscombe, "but they got the money, and they got it early."
What are your thoughts?
3 people like this
4 responses
@sedel1027 (17846)
• Cupertino, California
14 Feb 08
That is sort of what I figured it would be. I had read somewhere a week or so ago, that this check would just count a income and we would be taxed on it for our 2008 taxes.
2 people like this
@coffeebreak (17797)
• United States
14 Feb 08
No you are not taxed on this check, it is deducted from any refund you will have next year. If your 1040 says you get $1,000 refund and this summer you get a "rebate" check for $600 - that $600 is deducted from your $1,000 refund and you will only get $400 refund next year.
@sedel1027 (17846)
• Cupertino, California
14 Feb 08
Hhmmm i know our income will be close to double to what it was last year. Maybe I should just keep the check, since we will probably end up owing due to the deduction.
@coffeebreak (17797)
• United States
14 Feb 08
I don't think it can make you owe, just break even. I mean if you get a check this summer for $1000 and next year your refund is $900 you'll only get $100. But if you owe next year, I dont' think it does anything to you either way. COuld be wrong, they only tell you what they want you to know so you'll go along with it!
@vivasuzi (4127)
• United States
14 Feb 08
That is lame if that is the way it works. I don't need the extra few hundred dollars if they are just going to take it away from me next year. I guess that means when I receive it I should just save it instead of spending it.
I think it's dumb becuase MANY people who don't read will take that check and spend spend spend. Then next year when they do their taxes and DON'T get any money back they will be screwed b/c a lot of people rely on that money. Luckily I do not rely on my tax refund as a means of income, it is just extra for me. But I know a lot of people who don't make much money who will take that 600$ or whatever they get and it will be gone in minutes.
2 people like this
@coffeebreak (17797)
• United States
14 Feb 08
Yeah, anda the point of doing this was to give america money to spend to help the recession. First, the little that it is, isn't going to help to much as most will just pay off bills and not buy anything new and secondly, what happens next year when everyone plans on a nice refund and gets dinged becauseo f this check and doesn't have as much to spend next year? Just post pone the recession????
@ebsharer (5515)
• United States
14 Feb 08
I read that artical earlier and I am really agervatied by it. I can't beleive that this is an advance on next years. I look forward to my income tax check. And whats going to happen to the people that worked this year but won't next? Then they will owe the government. Its not a rebate if its an advance. Its one or the other. They need to say it like it is, thats the problem with our government they say things to confuse us. They say one thing and depending on how you read it is depending on how you understand it. Personally I don't want it if it is an advance.
1 person likes this
@coffeebreak (17797)
• United States
14 Feb 08
Yeah, its just an advance on next years refund. I don't plan on anything with my refund, ,most of the time I owe anyway as I am upperlow income with no tax deductions! Little bit I get just pays the bills as needed.
@asawako48162 (3321)
• United States
15 Feb 08
money is still money and no matter what you call it just spend it or save it so that you will benefit from the good of it..it is a psychologic move to stimulate the economy..this will help some pwople get a few bucks in their pockets and what is the difference as long as you know you are getting the money up front..this is not a windfall..it is your money anyway you look at it..better then nothing
1 person likes this
@coffeebreak (17797)
• United States
15 Feb 08
Yes, but at first they make is sound like the governement is "giving" the country money to help with the economy. But what they don't tell you is that they aren't "giving" you money, they are "advancing" you your OWN money from next years 1040 refund. What you gte this summer will be deducted from any refund you get NEXT year! Yes, it is yours, and You either get it now, or next year - basically waht's the difference? Well, What if you are okay this year but next year, really need that refund and it will be "short". And what about the economy next year? What if it is worse than this year and now everyone will be short their tax refund for the 2nd - 3rd quarter spending? (Ever notice how they say "cpending was up last month" and it is in January, talking about December or in the 2nd quarter of the year when most have their refunds and spend it at that time? 3rd quarter is summer - vacation time, so yeah, spending it going to be uP!)
They are borrowing from Peter to pay Paul and next year Peter is going to be short and we, the people, are Peter! Throw in how many people will forget to report what they got on this rebate and expect alot and when they get their check it is short and now they don't have the money to spend as they planned.
I know money is money, and I can take it and save it for next year, but others can't/won't or just need it now and aren't going to think about it until they are short next year! At least they are not saying if they rebate you this year more than you have a refund next year, are they going to make you pay it back? They haven't said yes or no, but that might rear its ugle head between now and then, but since we'll have a new president, he could change it either way!
Just a discussion - to each his own. I never plan on a refund for a specific purpose. I don't even think about it. I do the best I can - we have no deductions of any kind, (can't afford to buy anything that offers the deductioN!) so if anything, it isn't much anyway.
Thing is too, most will use it to pay off bills and that doesn't help the economy - they want people to go buy more things, not pay off what they alread have.
1 person likes this
@asawako48162 (3321)
• United States
16 Feb 08
Yes, i understand
Borrow from Peter to Pay Paul
but all you get is a sore peter?
it is not fair that we are being treated like the village idiot. the gov't is always doing some with "other people's money" and in the end..the rich get rich and the poor get poorer.
i am not making fun of your situatin as i am not far from homeless myself..it is not good to always be afraid of something we should have..as this is supposed to be the greatest country in the world.
1 person likes this
@coffeebreak (17797)
• United States
17 Feb 08
They most certainly could have/ should have been very much more upfront and "mentioned" that the rebate is from next year's tax refund. OR not even called it a rebate (as they aren't giving us anything back, which is what a rebate is) They way it has been presented is nothing more than a "presentation to the stupid and hope they stay stupid".
Thing is to... if I (or anyone) get the $1200 "rebate" and invest it...it is going to earn interest. And that interest is taxable next year - which means income rises, and so does the amount you owe...ergo it could actually cost us next year!
