Senate Deal on Economic Stimulus Plan

Helena

Helena

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Senate has deal on economic stimulus plan - Boston.com


February 7, 2008

WASHINGTON (Reuters) - Democrats and Republicans in the U.S. Senate have reached a deal on an election-year economic stimulus plan that would send government rebate checks to millions of Americans including retirees and disabled veterans.
 
Surprisingly quick, considering they were squabbling about doling out money.
 
Senate Democrats agree to GOP stimulus plan

MarketWatch


WASHINGTON (MarketWatch) -- After coming up one vote short on their bill on Wednesday, Senate Democrats agreed Thursday to an economic stimulus bill backed by the Republican minority.

The Senate was to vote on the bill later Thursday. Once the Senate acts, the House is likely to approve the measure quickly and send it to President Bush for his signature.

**

The Senate Republican plan is similar to the House-passed measure, but would also give tax rebate checks to seniors, veterans and disabled people. The bill also has provisions to prevent undocumented immigrants from receiving tax rebates.

The bill agreed to is the one Senate Republican leader Mitch McConnell proposed earlier in the week, which is nearly identical to one passed by the House last week after negotiations among House leaders and the White House.

Senate Democrats agree to GOP stimulus plan - MarketWatch
 
So is it based on 2007 income? I can't find any article that lists the details.
 
Senate Approves $151 Billion Economic Stimulus Bill

**


Rebate Checks


The House measure would send tax-rebate checks of $600 to $1,200 to about 111 million Americans who show at least $3,000 in earned income or who pay income tax. The Senate bill approved today follows the same formula, while allowing people living on Social Security or disability benefits to get a rebate as well.


The rebates phase out for individuals earning more than $75,000 and couples earning more than $150,000. Any taxpayer who has children and qualifies for any rebate will receive an additional $300 per child.


The bill also doubles the amount of equipment costs a small business can expense in the first year to $250,000 and allows a 50 percent bonus depreciation for businesses that buy major equipment.


Fannie Mae and Freddie Mac, the government-sponsored mortgage finance companies, will be allowed to buy loans worth as much as $729,750 in expensive markets, an increase over the current $417,000 loan limit, a move that could help struggling homeowners to refinance large mortgages at a lower interest rate.



Bloomberg.com: Worldwide
 
Bummer... well, no check for us. I guess I'll have to come up with another way to stimulate the ol' savings account.
 
Does anyone have a link to the actual language of the bill that was passed? In this part -
The House measure would send tax-rebate checks of $600 to $1,200 to about 111 million Americans who show at least $3,000 in earned income or who pay income tax.
Click to expand...

I'm wondering what comprises "earned income". My son had wages of $2450, where taxes were withheld and he was issued a W2. But he also had $750 paid by check but not as payroll, no taxes were withheld and he was not issued a 1099MISC, so the $750 will be shown on Line 21 - Miscellaneous Income.

I'm trying to find out if the rebate comes from only wages or if the misc. income counts toward the $3000.
 
And now we know how we're going to pay for this "stimulus package". It's merely an advance on the tax refund people will get next year, not a "rebate". So in our case, we might get $1200 extra this year, but next year, instead of receiving a tax refund, we'll probably owe the IRS. So in other words, it's just a way to get people to spend this year some of the tax refund money they would have received next year. It's just a loan, not "free" money. So now I know what I'll do with that "rebate". I'll save it to pay what I'll owe to the IRS next year.

Treasury chief: Tax rebate checks to go out in May - CNN.com

The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time.
Click to expand...
 
Last edited:
From Firedreamer's CNN.com link,

Nearly half (46 percent) said they plan to use the rebate to pay off debt and a quarter (28 percent) would save the money
Click to expand...

OK, that's the last straw. I'm going to do my patriotic duty and blow my $600 in an impulsive buying spree! :angel:
 
Sue J said:
Does anyone have a link to the actual language of the bill that was passed? In this part -


I'm wondering what comprises "earned income". My son had wages of $2450, where taxes were withheld and he was issued a W2. But he also had $750 paid by check but not as payroll, no taxes were withheld and he was not issued a 1099MISC, so the $750 will be shown on Line 21 - Miscellaneous Income.

I'm trying to find out if the rebate comes from only wages or if the misc. income counts toward the $3000.
Click to expand...
I would think income is income (whether miscellaneous or not). I'm guessing that he'll probably get it, since he'd be above the $3,000 lower limit.
Which seems kinda silly. A person making $3,000 wouldn't have paid any taxes in the first place (well, aside from SS & medicare). :duh:
 
FIREdreamer said:
And now we know how we're going to pay for this "stimulus package". It's merely an advance on the tax refund people will get next year, not a "rebate". So in our case, we might get $1200 extra this year, but next year, instead of receiving a tax refund, we'll probably owe the IRS. So in other words, it's just a way to get people to spend this year some of the tax refund money they would have received next year. It's just a loan, not "free" money. So now I know what I'll do with that "rebate". I'll save it to pay what I'll owe to the IRS next year.

Treasury chief: Tax rebate checks to go out in May - CNN.com
Click to expand...

Yep someone will pay. It seems like to me some wealth distribution is going on.
 
Marquette said:
Bummer... well, no check for us. I guess I'll have to come up with another way to stimulate the ol' savings account.
Click to expand...

Bah, if it's an advance, it won't matter anyway - I'd just send it back to the IRS in my quarterlies.
 
What happened to the idea of eliminating the 10% tax bracket? Is that still a possibility? If that's still included in the package, then taxes in 2008 and later will be smaller, explaining the rebate as a pre-refund.
 
FIREdreamer said:
And now we know how we're going to pay for this "stimulus package". It's merely an advance on the tax refund people will get next year, not a "rebate". So in our case, we might get $1200 extra this year, but next year, instead of receiving a tax refund, we'll probably owe the IRS. So in other words, it's just a way to get people to spend this year some of the tax refund money they would have received next year. It's just a loan, not "free" money. So now I know what I'll do with that "rebate". I'll save it to pay what I'll owe to the IRS next year.

Treasury chief: Tax rebate checks to go out in May - CNN.com
Click to expand...

Not really true. The rebate is a tax cut. In 2008 the 10% bracket will start at $6,000 for just one year. So the first $6,000 will be the 0% bracket giving you $600 more in refunds. You will get it in 2007 and account for it in 2008.

However its not free. It will go on the deficit and be paid by your kids :D.
 
Bikerdude said:
Not really true. The rebate is a tax cut. In 2008 the 10% bracket will start at $6,000 for just one year. So the first $6,000 will be the 0% bracket giving you $600 more in refunds. You will get it in 2007 and account for it in 2008.
Click to expand...

That's how I read it too. That would be better than giving me $600 of my '08 refund early.......since I won't get that much of a refund for '08, IF I get ANY refund for '08. I prefer to either break even or owe a little, rather than make an interest free loan to our uncle. ;)
 
Bikerdude said:
Not really true. The rebate is a tax cut. In 2008 the 10% bracket will start at $6,000 for just one year. So the first $6,000 will be the 0% bracket giving you $600 more in refunds. You will get it in 2007 and account for it in 2008.
Click to expand...

Do you have a source for that? I am trying to find more information about it and I didn't see this information reported anywhere so far. If that's the case, then it would be more like a tax cut for 2008? They just happen to give you the extra refund one year early, is this correct?
 
FIREdreamer said:
Do you have a source for that? I am trying to find more information about it and I didn't see this information reported anywhere so far. If that's the case, then it would be more like a tax cut for 2008? They just happen to give you the extra refund one year early, is this correct?
Click to expand...

You are correct. I posted this link before. You must have missed it.

What the stimulus package means for you - MarketWatch
 
Helena said:
Strange CNN News Edit Concerning Tax Rebate ??

This sentence was posted on a CNN news article today, then removed.

The checks are an advance on next year's refunds,
and most, if not all of the money, will be deducted
from taxpayers' refunds in 12 months' time.


Was the information wrong... or ??
Click to expand...

The above statement is correct but also confusing. Next years refunds include a $600 "tax cut". This is for 2008 only. You will get the money this year and account for it next year. If anyone knows how to say it in simpler terms have at it.
 
Sue J said:
Does anyone have a link to the actual language of the bill that was passed? In this part -


I'm wondering what comprises "earned income". My son had wages of $2450, where taxes were withheld and he was issued a W2. But he also had $750 paid by check but not as payroll, no taxes were withheld and he was not issued a 1099MISC, so the $750 will be shown on Line 21 - Miscellaneous Income.

I'm trying to find out if the rebate comes from only wages or if the misc. income counts toward the $3000.
Click to expand...

Sue, it looks to me like it is going to be based on 2007 AGI, which is the last number on the front page of his tax return, assuming he filed form 1040.

2Cor521
 
SecondCor521 said:
Sue, it looks to me like it is going to be based on 2007 AGI, which is the last number on the front page of his tax return, assuming he filed form 1040.

2Cor521
Click to expand...

I'm hoping that's how it works. He'll pay a little tax, but be eligible for the rebate.
 
So it means that in 2008, I can convert an additional $6,000 to a Roth IRA and pay no tax on it. That is, I will save $600. Yes?
 
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