My accountant said I would pay exactly the amount of my refund "extra" next year. Others say it's a gift from the government, and will not have to be paid back. From what I've found so far, It appears both observations are correct.
Next year's tax budget includes an additional deduction of $600 per person and $300 per child. Instead of benefitting next year, you do so this year. It's an extra deduction for '08 income, but getting the check against '07 income, means you don't get the deduction next year.
This check will be reflected in next years tax return, in as far as you can't take the same deduction twice. You may be paying extra next year, in comparison to what you would have paid with no rebate check. It all depends on your situation. It is a "gift", as it's an extra deduction. It's also a "loan", as it's planned into the budget for our next year's payments.
Well...that's what I can make of it so far anyway. Feel free to correct me if I'm wrong.
We decided to just burn it ....
We're gonna take some of our rebate and buy a truck load of logs, DH will split it all (yes we have a log splitter) and we'll heat our house for almost the next two winters for around the cost of 175 gallons of oil. The rest of the rebate...hmmmm....still working on that one. We will probably save most of it, maybe spend a little on something fun.
I didn't find this in the fine print, but it was in the IRS web site...
Is my stimulus payment taxable?
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.
If my stimulus payment is not going to affect my 2008 tax refund or increase the tax I owe next year, why is it I need to retain the letter that lists how much I received?
In the event you do not qualify for the full amount on your 2007 return but you do on your 2008 return, you will need to have the letter as a record of the amount you previously received.
Will the payment I receive in 2008 reduce my 2008 refund or increase the amount I owe for 2008?
No, the stimulus payment will not reduce your refund or increase the amount you owe when you file your 2008 return.
I don’t qualify for a stimulus payment based on my 2007 return. But my tax situation will be different in 2008. Will I qualify for any special benefit?
Possibly. The 2008 tax instructions will include a worksheet to help those who did not qualify for a payment or those who received a reduced amount determine if they can obtain a benefit when they file their 2008 tax returns next year.
Love my mass produced, entry level, built by Lazy American Workers, Hornet
Accountants interpretations of the tax codes are like RV.Netters opinions on RV's, TV, and CG's, it's rare that two accountants will file you income taxes the same way, in my observation as long as they are close to the previous filing there's no red flags!
With all that being said, I was listing to an IRS agent on a Boston Radio station on the way in to work yesterday, the one thing he did say is this money is considered income and it may not have an effect on everyone's filings next year, only the ones who are close to the top of their current income bracket and this stimulatory payment puts you into the next higher tax bracket.
So, this was from an IRS agent, and if you ever dealt with the IRS, they are just like the opposite of a tax accountant, they will apply their interpellation of the tax code in anyway to increase your obligation to meet their specific application of the tax code.
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shenandoahvalley wrote: Tax Rebate Stimulus Package whatever, arrived in our account this morning...can't decide exactly what to do with. I think it will almost buy a whole tank of gas.
If you haven't figured out what to to with it yet, I can help
I didn't read the whole thread so you may have already received this same offer but I really have some good ideas
Accountants interpretations of the tax codes are like RV.Netters opinions on RV's, TV, and CG's, it's rare that two accountants will file you income taxes the same way, in my observation as long as they are close to the previous filing there's no red flags!
With all that being said, I was listing to an IRS agent on a Boston Radio station on the way in to work yesterday, the one thing he did say is this money is considered income and it may not have an effect on everyone's filings next year, only the ones who are close to the top of their current income bracket and this stimulatory payment puts you into the next higher tax bracket.
So, this was from an IRS agent, and if you ever dealt with the IRS, they are just like the opposite of a tax accountant, they will apply their interpellation of the tax code in anyway to increase your obligation to meet their specific application of the tax code.
Dont be fooled. IRS agents dont know the tax code any better than Accountants. From the IRS website:
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.
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