Join Early Retirement Today
Reply
 
Thread Tools Display Modes
2009 Stimulus Tax Credit
Old 02-16-2009, 09:28 AM   #1
Confused about dryer sheets
 
Join Date: Feb 2009
Posts: 5
2009 Stimulus Tax Credit

It appears that the new stimulus bill just passed offers a tax credit of 400.00 geared toward individuals with
earned income or a onetime rebate check of 300.00 to retirees on SS. What about individuals who receive only unearned income and are not yet on SS. How does the tax credit work for this group of people?
newspaper56 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 02-16-2009, 09:33 AM   #2
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
I do not think it does; unless you go buy a car, go get and then lose a job. Well I take that back it will work but in the reverse as you will incur the liability for it but then everyone does.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 02-16-2009, 12:12 PM   #3
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Quote:
Originally Posted by newspaper56 View Post
It appears that the new stimulus bill just passed offers a tax credit of 400.00 geared toward individuals with
earned income or a onetime rebate check of 300.00 to retirees on SS. What about individuals who receive only unearned income and are not yet on SS. How does the tax credit work for this group of people?
From what I could determine that group will get zero. I wrote my elected officials and asked them why. My income is well below the cutoff and I pay taxes unlike some of the SS beneficiaries. I really don't give a cr*p, I just like to jangle their cage a little.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 02-16-2009, 06:42 PM   #4
Recycles dryer sheets
 
Join Date: Mar 2008
Posts: 410
The way I understand it, the rebate will be applied to FICA taxes. If you're on a pension, paying income tax, but not FICA, you get nothing.

There's a one time $250 check for those receiving SS. I don't think federal, military, and other non-disability related government pensioners get anything.

I always question why military pensions are subject to federal tax, when many states exempt them. The small amount is insignificant to the government, but makes a difference to many of us retirees.
BLS53 is offline   Reply With Quote
Old 02-16-2009, 07:06 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
Sounds like if you're working but not part of SS, such as many teachers and other state, county and municipal employees, you'll also be omitted. Can't wait to hear the teachers unions respond to this!
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 02-16-2009, 07:41 PM   #6
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Quote:
Originally Posted by youbet View Post
Sounds like if you're working but not part of SS, such as many teachers and other state, county and municipal employees, you'll also be omitted. Can't wait to hear the teachers unions respond to this!
From what I've seen as long as you have "earned income" you qualify. Not paying into SS has no effect from what I can see. State and federal employee's who took early retirement and do not work PT and are not on SS will not qualify, so that may cause a stir.

If you don't make enough to pay taxes but work, you will still receive a payment. If you are retired and on a government program you will receive a one time payment. If you provide your own support and are not on a government program you will receive nothing even if you pay taxes and are otherwise qualified by income.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 02-17-2009, 05:10 AM   #7
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
Quote:
Originally Posted by youbet View Post
Sounds like if you're working but not part of SS, such as many teachers and other state, county and municipal employees, you'll also be omitted. Can't wait to hear the teachers unions respond to this!
I do not work and all my income is "unearned" (Interest is "unearned" as are dividends and other forms of "passive income").
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 02-17-2009, 05:29 AM   #8
Recycles dryer sheets
Jeb-NY's Avatar
 
Join Date: Nov 2005
Location: Lost State of Franklin
Posts: 422
Only a little off topic: A day or so ago I heard a News Talking Head say to a Politician Talking Head, do you think $8/week extra in the pay check will really stimulate the economy. PTH corrects the NTH that it wasn't $8/week it was $800/couple/year. He said this to emphasizes how much bigger the number was.

I love it when I get to laugh out loud at hard news.

Jeb...
Jeb-NY is offline   Reply With Quote
Old 02-17-2009, 07:23 AM   #9
Full time employment: Posting here.
Dog's Avatar
 
Join Date: Apr 2006
Posts: 880
Will the credit be based on 2008 earnings?
Dog is offline   Reply With Quote
Old 02-17-2009, 07:43 AM   #10
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Quote:
Originally Posted by Dog View Post
Will the credit be based on 2008 earnings?
It seems you will have to qualify in 2009 for a 2009 payment and again in 2010 for those who work. The "retiree" payment is one time for 2009.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 02-17-2009, 08:58 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
samclem's Avatar
 
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
According to an article in today's WSJ (pg A4), the Obama administration is trying to figure out the psychology of those who will receive the credit to help assure more people spend it. Planers believe if the money "trickles out" as a few dollars per month (via reduced tax withholding), people will likely spend the money, but if it is received as a lump sum, they'll waste it by paying off debt or putting it into savings. The tweaking, micro-gaming in Washington continues.

There is also considerable handwringing about the present (apparently excessive) personal savings rate, which was 3.6% in December 2008, up from 0.4% one year earlier.

Okay, so the administartion wants us to spend the money and create jobs. I understand the short term goal. But short-term thinking (by businesses, consumers, and govt) is what spawned our current situation. Is it realy so bad if the Smith's pay off some debt, or start a personal monthly savings plan with their money? Wouldn't increased savings/equity investment help with our other crisis: lack of business liquidity? Wouldn't we be better able, as a nation, to handle economic shocks in the future if families had a few thousand bucks in an emergency fund (so a short-term perturbation like rising gas prices or a small increase in unemployment are buffered, rather kicking off a domino pattern of asset selling, foreclosures, etc?) Most importantly--how about a mesage of self-reliance and taking personal responsibilty for your actions, rather than relying on the nebulous great collective? Obama could be the messenger of this--it would be seen as "more of the same" from a conservative, but as an important wake-up call from the new administraion, particularly if backed by concrete action.
Just as only the recognized stalwart anti-comminist Nixon could have openned the door to China, maybe only the recognized former "most liberal senator in the US" can deliver the shocking news to the dependent masses. "Hope" comes from within, and the only "change" you can count on are the ones you make yourself.
samclem is offline   Reply With Quote
Old 02-17-2009, 09:17 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ziggy29's Avatar
 
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
Quote:
Originally Posted by samclem View Post
There is also considerable handwringing about the present (apparently excessive) personal savings rate, which was 3.6% in December 2008, up from 0.4% one year earlier.

Okay, so the administartion wants us to spend the money and create jobs. I understand the short term goal. But short-term thinking (by businesses, consumers, and govt) is what spawned our current situation. Is it realy so bad if the Smith's pay off some debt, or start a personal monthly savings plan with their money?
The problem isn't that people are becoming savers; long-term I think just about everyone sees that as a good thing. The problem, as some economists and politicians see it, is that the transition is occurring far too quickly and creating an economic shock. In other words, even though it seems like wishful thinking I suspect what is hoped for would have been a "soft landing" transition, a much more gradual one that didn't result in sudden and massive (in economic terms) decline in the velocity of money -- that the transition from borrowers to savers would come over several years, not months.

So in that sense, the trick is getting people to spend a little more (which requires, among other things, convincing consumers they aren't about to be unemployed -- good luck) without going whole-hog back to their old ways of profligate spending. To some degree, the elimination of widespread use of home as ATM card will prevent that, but not completely.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
ziggy29 is offline   Reply With Quote
Old 02-17-2009, 09:22 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
Quote:
Originally Posted by samclem View Post
... The tweaking, micro-gaming in Washington continues.

There is also considerable handwringing about the present (apparently excessive) personal savings rate, which was 3.6% in December 2008, up from 0.4% one year earlier.

... Is it really so bad if the Smith's pay off some debt, or start a personal monthly savings plan with their money? Wouldn't increased savings/equity investment help with our other crisis: lack of business liquidity? Wouldn't we be better able, as a nation, to handle economic shocks in the future if families had a few thousand bucks in an emergency fund (so a short-term perturbation like rising gas prices or a small increase in unemployment are buffered, rather kicking off a domino pattern of asset selling, foreclosures, etc?)

Most importantly--how about a message of self-reliance and taking personal responsibility for your actions,...

Obama could be the messenger of this---
Well said samclem.

What I see is, Obama has a unique, powerful, and much needed opportunity to live up to his campaign promises of "change", and deliver something positive to the public. Congress's approval rating is in the tank. Most of America (even those that did not vote for him), have a positive view on Obama.

I want to see the Obama that I got a snippet of from his campaign (when he spoke to the people about his Mom getting him up at 4:30AM to review his homework - the personal responsibility message). He can use his great communication skills to tell people the "tough love" story in a way that probably no other politician could. Instead of promising a "quick fix", tell people to save for a rainy day, explain that savings will provide liquidity for business, and we will slowly, surely come out of this.

I think he is throwing away this once-in-a-lifetime opportunity.

-ERD50
ERD50 is offline   Reply With Quote
Old 02-17-2009, 10:11 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
samclem's Avatar
 
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
Quote:
Originally Posted by ziggy29 View Post
The problem, as some economists and politicians see it, is that the transition is occurring far too quickly and creating an economic shock. In other words, even though it seems like wishful thinking I suspect what is hoped for would have been a "soft landing" transition, a much more gradual one that didn't result in sudden and massive (in economic terms) decline in the velocity of money -- that the transition from borrowers to savers would come over several years, not months.
Yes, but:
1) The economy is not some type of rocket ship responsive to fine inputs that have calculable results.
2) People are not communal insects willing to sacrifice themselves to the collective.

If the above two statements were false, the USSR would still be around and we'd be in the dustbin of history.

And, if it is an "economic shock" that people are saving approx 4% of their income, then it's something to which the economy should react. Does anyone think 4% is realy excessive? If not, then encourage people to do it and let the system adjust to the new reality.

Economics" may be called the "dismal science", but I think it is more "dismal" than it is "science," which os why govt micro-tweaking is not effective. Let market force work this out.

I guess I'm ready to for government to stop trying to reduce the magnitude of the short-term pain by extending its duration. One lesson (controversial, but backed by some sound research) of the Great Depression is that government intervention (the New Deal) prolonged the pain and the severity.

We're pulling the Bandaid off 1 mm at a time.
samclem is offline   Reply With Quote
Old 02-17-2009, 10:16 AM   #15
Full time employment: Posting here.
hankster's Avatar
 
Join Date: Jan 2008
Posts: 649
Quote:
Originally Posted by samclem View Post
According to an article in today's WSJ (pg A4), the Obama administration is trying to figure out the psychology of those who will receive the credit to help assure more people spend it. Planers believe if the money "trickles out" as a few dollars per month (via reduced tax withholding), people will likely spend the money, but if it is received as a lump sum, they'll waste it by paying off debt or putting it into savings. The tweaking, micro-gaming in Washington continues.
Maybe they could issue it in the form of a debit card that can't be used for cash. It's only good for purchases. A national "Shop 'til the balance is $0 day".

Of course this wouldn't prevent people from using it to buy essentials, then using their essentials money for savings or paying down debt.
__________________
"There is no dignity quite so impressive, and no independence quite so important, as living within your means." Calvin Coolidge
hankster is offline   Reply With Quote
Old 02-17-2009, 10:31 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Quote:
Originally Posted by ERD50 View Post
I want to see the Obama that I got a snippet of from his campaign (when he spoke to the people about his Mom getting him up at 4:30AM to review his homework - the personal responsibility message). He can use his great communication skills to tell people the "tough love" story in a way that probably no other politician could. Instead of promising a "quick fix", tell people to save for a rainy day, explain that savings will provide liquidity for business, and we will slowly, surely come out of this.

I think he is throwing away this once-in-a-lifetime opportunity.

-ERD50
Cold and can't afford the gas/oil bill? Put on a sweater.

Carter tried this during the 79 oil crisis. Let's face it -- even the so-called "self responsibility" cowboy crowd doesn't want to take responsibility for themselves.
eridanus is offline   Reply With Quote
Old 02-17-2009, 10:33 AM   #17
Thinks s/he gets paid by the post
Gotadimple's Avatar
 
Join Date: Feb 2007
Posts: 2,605
Quote:
Originally Posted by hankster View Post
A national "Shop 'til the balance is $0 day".
Isn't that the same as the day before Christmas? With people grabbing anything because they have obligations?

Seems wasteful.

-- Rita
__________________
Only got A dimple, would have preferred 2!
Gotadimple is offline   Reply With Quote
Old 02-17-2009, 10:35 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
Quote:
Originally Posted by hankster View Post
Maybe they could issue it in the form of a debit card ...

Of course this wouldn't prevent people from using it to buy essentials, then using their essentials money for savings or paying down debt.
That is *exactly* the thought process I went through a few days ago when I was thinking about this.

Once again, you just can't account for the unintended consequences. If you create an *artificial* incentive, you get *artificial* results. Yet, Congress would take credit anyhow.

-ERD50
ERD50 is offline   Reply With Quote
Old 02-17-2009, 10:37 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
Quote:
Originally Posted by eridanus View Post
Cold and can't afford the gas/oil bill? Put on a sweater.

Carter tried this during the 79 oil crisis. Let's face it -- even the so-called "self responsibility" cowboy crowd doesn't want to take responsibility for themselves.
Well, it's all in the delivery.

Not many would disagree that Obama is a more inspirational speaker than Carter.

-ERD50
ERD50 is offline   Reply With Quote
Old 02-17-2009, 10:46 AM   #20
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
"Talk the talk but Walk the walk?" comes to mind: heard the Oval Office is kept at 80 degrees; wish I could keep my home that warm.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
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
Stimulus and 2008 tax return? JohnDoe FIRE and Money 2 02-14-2009 08:17 PM
2009 Tax Planning PDF mickeyd FIRE and Money 3 01-05-2009 09:00 PM
Stimulus Payment Schedule for Tax Returns Processed by April 15 CCdaCE FIRE and Money 13 04-13-2008 12:35 PM
Tax News for 2008 Economic Stimulus Pymts freebird5825 FIRE and Money 0 02-27-2008 07:18 AM
Hybrid tax credit -- NOT ? Rich_by_the_Bay FIRE and Money 6 10-26-2006 12:12 PM

» Quick Links

 
All times are GMT -6. The time now is 01:40 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.