We just got out of a meeting this morning. The IRS released specifics about this "Rebate".
After reading the fact sheet, this is what we found. The newspapers and tv have been slightly misinforming us. IRS Info
*Important*
If you chose direct deposit for a refund on your 2007 return, your rebate will be automatically be sent to that account. So DO NOT change/close the account you used for the direct deposit.
You DO HAVE to file a return to get this. It has to be the "long" 1040 or the 1040A. The 1040EZ will not qualify you. So, "force" the 1040 or 1040A if you have to.
This is NOT an ADDITIONAL amount over your refund. This is an ADVANCEMENT of a credit you MIGHT qualifiy for on your 2008 tax return. Basically what's happening is the IRS is giving you the money for a credit you might qualify for on your next years return. What ever you get in May or whenever will then be recalculated on your 2008 tax return.
Examples to help understand.
Your 2007 return has a tax liability of $5000. You get the full $1200 rebate. Then in 2008, you have $5000 tax liability again, but you already received the $1200 credit/benefit, so you get less of a refund for your 2008 return.
Your 2007 is same as above. Your 2008 return has you NOT qualifying at all. You don't have to pay the excess back.
February 16, 2008
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5 comments:
So I basically need to make sure I get 0 dollars back next year by adjusting my deductions so I get all my normal refund money throughout the year, and get to keep all that stimulus money?
You got it!
Q. Will the payment I receive in 2008 reduce my 2008 refund or increase the amount I owe for 2008?
A. No, the stimulus payment will not reduce or increase your refund when you file your 2008 return.
Why are they lying?
technically they're not. In 2008 you would receive a non-refundable credit that would reduce your tax. However you took that credit early. Nonrefundable means that once it knocks out your tax, you don't get the rest. If you take the credit now, you'll get the the whole amount. Think Child Tax Credit/Additional Child credit. With this you just don't get the additional part. So you would be "reducing" the amount you'd get back.
I see. Dirty trick.
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