Quickbooks, Bookkeeping and Accounting Blog

President Bush signed the economic stimulus package into law today, meaning about 130 million Americans will receive tax rebates. Information about the rebates follows:

• You have to file a return to get a rebate check. Most Americans file returns anyway, but approximately 10-20 million Americans (lower income tax payers, social security recipients, recipients of verterans’ benefits) don’t normally have to file.
• Stimulus payments will begin to go out in May.  They will be sent separately from your regular refund.
• Rebates will not count as taxable income. If you owe back taxes, however, the IRS will apply the rebate to the back taxes.
• How big will your tax refund be?
  • Individuals with adjusted gross income (AGI) up to $75k are eligible to receive up to $600.
  • Married couples filing jointly with adjusted gross income up to $150k are eligible to receive up to $1,200.
  • If you have children, you will receive an additional $300 for each child (no limit on the number of children).
  • Individuals with AGI of more than $75k and married couples filing jointly with AGI of more than $150k can estimate rebates by calculating their potential rebate ($600/adult + $300/child) and then subtracting $50 for every $1,000 over the limit ($75k for individuals, $150k for married couples filing jointly).
  • Workers who earn too little to pay income taxes but have income of at least $3,000 (including social security and certain veterans’ and railroad retirement benefits) are eligible for rebates of $300 ($600 for married couples filing jointly).
• If you already filed, you don’t need to do anything else to get your rebate.
• Assuming you will owe taxes in 2008, the tax rebate is not a gift. It is essentially an advance on your 2009 refund. If you won’t owe any taxes in 2008, then for you this is free money.