2007 tax rebate question

[JohnDoe]

Since, from what I read, this rebate was estimated using 2007 income even though it was going to be for 2008, if you exceeded the 2007 income limits, but you don't exceed the 2008 income limits, will still get this money when you file a 2008 return?

In other words, your tax would be reduced $600 when you file next year. Is this correct?

Thanks.
JD

 

[OAG]

No!

 

[JohnDoe]

This is the article I was referring to...Sandra Block (USA TODAY)

TAXES
Myth: Because I'm getting a tax rebate this year, my 2008 tax bill will be higher.
Reality: No, it won't.

Starting next month, more than 130 million taxpayers, senior citizens and disabled veterans will receive rebates ranging from $300 to $600, or $1,200 for married couples who file jointly. Parents with dependent children under age 17 will be eligible for an additional $300 per child.

Technically, the rebate is a credit based on your 2008 taxes. To get money into consumers' wallets more quickly, though, Congress decided to calculate the rebate using taxpayers' 2007 returns, says Mel Schwarz of the accounting firm Grant Thornton.

If it turns out you're due a larger credit, you can claim it when you file your 2008 tax return. And if your rebate was too large? No worries: You won't have to give the money back.

Surveys suggest that taxpayers will be more likely to save their rebate or use it to trim debt than to spend it. But whatever you do with the money, don't worry about setting aside a portion of your check for the IRS. The rebate won't be treated as income when you file your 2008 return, Schwarz says.

 

[sarahsays]

Yes, but if you exceed the 2007 income limits, then you essentially get nothing and you can't deduct it on your 2008 taxes either.

 

[kaneohe]

This is the article I was referring to...Sandra Block (USA TODAY)

Technically, the rebate is a credit based on your 2008 taxes. To get money into consumers' wallets more quickly, though, Congress decided to calculate the rebate using taxpayers' 2007 returns, says Mel Schwarz of the accounting firm Grant Thornton.

If it turns out you're due a larger credit, you can claim it when you file your 2008 tax return. And if your rebate was too large? No worries: You won't have to give the money back.

.

I have seen similar things on the fairmark.com forum so I'm guessing this is true.

 

[OAG]

My response in #2 may be all wet. This from the IRS Web Site (Google "Irs Rebate" and read the FAQ's):

Q. 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?

A. 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.

 

[EarlyRetiree1978]

Yes, but if you exceed the 2007 income limits, then you essentially get nothing and you can't deduct it on your 2008 taxes either.

For those with high incomes and mortgage loans above $417K but below $729,750, there was a nice little gem added to the Economic Stimulus Act of 2008.

Economic Stimulus' Biggest Real Estate Winners

 

[Niko]

My understanding is that if you do not qualify in 2007, but you otherwise would qualify in 2008 (or you would otherwise qualify for a larger rebate in 2008), you get the difference after filing your 2008 return. However, in the opposite situation (you qualify in 2007 but you would not qualify in 2008) you will not be penalized.

Someone let me know if my understanding is incorrect. I'm [-]expecting[/-] hoping to get an additional $300 after filing my 2008 return because I have a child that was born in Jan. 2008. I can't claim her for 07 but I can in 08.