Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 02-14-2008, 11:15 AM   #21
Confused about dryer sheets
 
Join Date: Feb 2008
Posts: 8
Quote:
Originally Posted by BristolBane View Post
If I'm understanding the mechanics correctly, it means that the IRS will adjust the tax brackets so that the first $6,000 dollars of earned income is not taxed. Normally it would have been taxed at 10% or $600. And they are sending us the $600 now instead of waiting until people file their returns in 2009(?).
Actually, they are issuing a tax credit in lieu of adjusting tax brackets. The tax brackets will continue to tax the first $6,000 of your income at 10%.

If they did change the tables AND issued the credit checks, you would be getting double the cut. So they won't.
__________________

__________________
ChuffDaddy is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-14-2008, 11:15 AM   #22
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,402
Quote:
Originally Posted by youbet View Post
You seem informed on this subject ChuffDaddy. Do you know exactly which line on form 1040 will be used as "the number" to determine if you're qualified in terms of income or not?
I'm not ChuffDaddy, but my understanding is that it will be based on AGI. On a 2007 1040 (which is what most people here are working on filing right now), one's AGI is found on line 37.

2Cor521
__________________

__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 02-14-2008, 11:18 AM   #23
Recycles dryer sheets
 
Join Date: Jan 2008
Posts: 314
Quote:
Originally Posted by youbet View Post
You seem informed on this subject ChuffDaddy. Do you know exactly which line on form 1040 will be used as "the number" to determine if you're qualified in terms of income or not?
While ChuffDaddy hasn't responded, I will.
The rebate is not taxable at the Federal level. Each state will deal with it as they choose.
The rebate is also evidently isn't affected by SS (i.e. it's doesn't lower your SS check).
The 1040 uses line 37 for AGI, and 1040A uses line 21 for AGI. And for those that may use it, 1040EZ the AGI is on line 4.

Information (from the "horse's mouth"):
Information on Stimulus Package
Facts about the 2008 Stimulus Payments
http://www.irs.gov/pub/irs-pdf/f1040.pdf
http://www.irs.gov/pub/irs-pdf/f1040a.pdf
http://www.irs.gov/pub/irs-pdf/f1040ez.pdf
__________________
Primary title "chief moron"
myself is offline   Reply With Quote
Old 02-14-2008, 11:22 AM   #24
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
No checks to anyone (who qualifies) who had direct debit/deposit of their current (2007) tax refund of payment - the "rebate" "premature refund" or whatever else you want to call it will just be a deposit to your account. What happens in 2009 when you file your 2008 taxes is IMHO unknown now although it is interesting to read all of the possibilities as mentioned here.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 02-14-2008, 11:27 AM   #25
Confused about dryer sheets
 
Join Date: Feb 2008
Posts: 8
Quote:
Originally Posted by youbet View Post
You seem informed on this subject ChuffDaddy. Do you know exactly which line on form 1040 will be used as "the number" to determine if you're qualified in terms of income or not?
As I understand it, the income limits apply to Adjusted Gross Income, less dividends, capital gains, and interest. So what is that, Line 37 less Lines 8a, 9a, and 13?

There are other rules for individuals who receive Social Security benefits, Railroad Retirement benefits and certain veteransí benefits.
__________________
ChuffDaddy is offline   Reply With Quote
Old 02-14-2008, 11:47 AM   #26
Confused about dryer sheets
 
Join Date: Feb 2008
Posts: 8
Quote:
Originally Posted by R Wood View Post
No checks to anyone (who qualifies) who had direct debit/deposit of their current (2007) tax refund of payment - the "rebate" "premature refund" or whatever else you want to call it will just be a deposit to your account. What happens in 2009 when you file your 2008 taxes is IMHO unknown now although it is interesting to read all of the possibilities as mentioned here.
Well, we do know this. Barring any changes to the tax law between now and the end of the year, if your income and deductuions are substantially the same as last year's, you will pay about the same amount in federal income taxes. Plus, you will be getting a nice little check sometime this year--an advance credit--to spend or save as you see fit. This will effectively lower your tax bill for 2008.
__________________
ChuffDaddy is offline   Reply With Quote
Old 02-14-2008, 11:50 AM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Thanks ChuffDaddy and myself!
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 02-14-2008, 12:45 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 11,198
Here is actual text:

Search Results - THOMAS (Library of Congress)

or

guywong.com: Full text of final Stimulus Package, H.R. 5140

(a) In General- In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2008 an amount equal to the lesser of--

`(1) net income tax liability, or

`(2) $600 ($1,200 in the case of a joint return).

.
.
.

(2) TAXPAYER DESCRIBED- A taxpayer is described in this paragraph if the taxpayer--

`(A) has qualifying income of at least $3,000, or

`(B) has--

`(i) net income tax liability which is greater than zero, and

`(ii) gross income which is greater than the sum of the basic standard deduction plus the exemption amount (twice the exemption amount in the case of a joint return).

.
.
.
(d) Limitation Based on Adjusted Gross Income- The amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (f)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer's adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return).

.
.
.
(1) QUALIFYING INCOME- The term `qualifying income' means--

`(A) earned income,

`(B) social security benefits (within the meaning of section 86(d)), and

`(C) any compensation or pension received under chapter 11, chapter 13, or chapter 15 of title 38, United States Code.

.
.
.
(4) EARNED INCOME- The term `earned income' has the meaning set forth in section 32(c)(2) except that--

`(A) subclause (II) of subparagraph (B)(vi) thereof shall be applied by substituting `January 1, 2009' for `January 1, 2008', and

`(B) such term shall no

.
.
.
(1) IN GENERAL- In the case of a taxpayer described in paragraph (2)--

`(A) the amount determined under subsection (a) shall not be less than $300 ($600 in the case of a joint return), and

`(B) the amount determined under subsection (a) (after the application of subparagraph (A)) shall be increased by the product of $300 multiplied by the number of qualifying children (within the meaning of section 24(c)) of the taxpayer.
__________________
TromboneAl is offline   Reply With Quote
Old 02-14-2008, 06:12 PM   #29
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
Here is some information from the "horse's Mouth": Information on Stimulus Package
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Two chances to qualify for rebate
Old 02-14-2008, 10:25 PM   #30
Dryer sheet wannabe
 
Join Date: Mar 2007
Posts: 22
Two chances to qualify for rebate

Note that you have two chances to qualify for the rebate/credit. If you qualify based on your 2007 tax return, you get the "refund". If you do not qualify based on your 2007 return, but qualify based on your 2008 return, you get to take a credit against your 2008 taxes.

This is implied in the language on the actual law. Search Results - THOMAS (Library of Congress)
The law's language is, like most of the tax law, only vaguely related to English.

Here it is in something a bit closer to English.
http://www.house.gov/jct/x-16-08.pdf

"Rebate checks

Most taxpayers will receive this credit in the form of a check issued by the Department of the Treasury. The amount of the payment will be computed in the same manner as the credit, except that it will be done on the basis of tax returns filed for 2007 (instead of 2008. It is anticipated that the Department of the Treasury will make every effort to issue all payments as rapidly as possible to taxpayers who timely file their 2007 tax returns. (Taxpayers who file late or pursuant to extensions will receive their payments later.)

Taxpayers will reconcile the amount of the credit with the payment they receive in the following manner. They will complete a worksheet calculating the amount of the credit based on their 2008 income tax return. They will then subtract from the credit the amount of the payment they received in 2008. For many taxpayers, these two amounts will be the same. If, however, the result is a positive number (because, for example, the taxpayer paid no tax in 2007 but is paying tax in 2008, the taxpayer may claim that amount as a refundable credit against 2008 tax liability. If, however, the result is negative (because, for example, the taxpayer paid tax in 2007 but owes no tax for 2008, the taxpayer is not required to repay that amount to the Treasury. Otherwise, the checks have no effect on tax returns filed for 2008; the amount is not includible in gross income and it does not otherwise reduce the amount of withholding."
__________________

__________________
ExHermit is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
When are post-tax savings better than pre-tax? RockMiner FIRE and Money 30 03-21-2009 01:56 PM
Tax Questions: 1. Cap Gains 2. Tax Rate TromboneAl FIRE and Money 2 12-12-2007 09:49 AM
Before-Tax or After-Tax AA calculation? mickeyd FIRE and Money 5 09-09-2006 08:39 PM
Vanguard tax-exempt MM at 2.6% pre-tax soupcxan FIRE and Money 17 12-28-2005 10:13 AM
Investment tax cuts in the new tax bill Telly FIRE and Money 1 05-23-2003 02:42 PM

 

 
All times are GMT -6. The time now is 12:56 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.