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HALLIDAY & COMPANY is interested in helping you achieve your individual and business financial goals. Understanding basic financial and tax concepts will help prevent costly mistakes and allow you to operate as efficiently as possible. For this reason, we publish “ACCOUNT-ABILITY” as a resource of helpful information, which we hope, will benefit you personally and/or as a business owner. |
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E-Mail brent@hallidaycpa.com |
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This newsletter offers factual and up-to-date information on the subjects discussed, but should not be regarded as a complete analysis of these subjects. No party assumes liability for any loss or damage resulting from reliance or use of this material. |
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TAX REBATE INFORMATION |
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Tax cuts are coming soon to try and stimulate the sagging economy. Leaders of both parties agree that fast action is needed to get money into consumers’ hands. The most talked about is the tax rebate checks.
IRS will move fast on tax rebates. The checks will start going out in early May once the Revenue Service finishes processing 2007 tax returns.
Tax rebate checks will be keyed to tax liability. Married couples will get a maximum rebate of $1,200 and single individuals $600, as long as they paid at least that much in taxes on their 2007 filed returns. Filers with kids under 17 get $300 per child extra.
Even those who do not pay any income tax can get rebate checks. Married couples with at least $3,000 of earned income will get a minimum of $600, plus $300 per child. Single individuals with $3,000 of earnings will receive $300. This includes seniors and disabled veterans. For rebate purposes, Social Security benefits and veterans’ disability count as earned income.
Individuals with high income will not qualify for the tax rebate checks. Rebates will start to phase out at $150,000 of adjusted gross income for couples and $75,000 for single individuals. Rebates will be reduced by $50 for each $1,000 over these amounts. Rebates are also not available to 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 your 2007 tax return. Filing an extension will delay your check.
On your 2008 tax return, you will reconcile your rebate with your 2008 tax situation. Technically, the rebate is an advance payment of a special 2008 tax credit. For most individuals, 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 larger than the credit, you need not repay the IRS.
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/pub/newsroom/1040a.pdf
You will need a valid social security number to get a rebate. IRS will send notices telling how much you will get and when it will arrive. If you choose direct deposit for your 2007 tax refund, IRS will wire the rebate to your account. The rebate will not be combined with your 2007 tax refund. And if you owe back taxes, the IRS will use the rebate to reduce your tax bill.
The IRS website has more information, facts and question and answer narratives. Some helpful links are listed below:
www.irs.gov right on the main page is a link to follow entitled “Rebate Questions”
http://www.irs.gov/irs/article/0,,id=177937,00.html |
