Question about tax rebate?

[Gwen]

I was wondering if anyone on here is familiar with that tax rebate this year? I am not good with accounting/tax stuff (we always have someone do ours), but my question is...if you owe on your taxes, does that mean you don't get the rebate?

Last year my husband worked two jobs (I'm a stay at home mum and don't have an income). One of his job pays a substantial amount, and if we were filing just with that we would get a return. But his other job he's a subcontractor and the company didn't take out taxes. Last year when we filed, we owed on our taxes because of it. I'm assuming it will happen this year too. But since he worked two jobs (one that was taxed, and one that wasn't), wouldn't they take that job he worked that was taxed into consideration? I just don't get how it works.

[Janet]

My understanding is this tax rebate is to try and boost the economy so you'll get it anyway....BUT....next year if you get a refund...the rebate you get now will be deducted from next years refund. Did I make that clear as mud????

If Tink sees this thread, she'll explain it waaaay better than me.

[Gwen]

Thanks Janet! Yeah, we were talking about just putting the rebate (if we get one) in a CD or something since we would have to claim it next year. But I had read this thing about stipulations regarding the rebate. Like if you make over 75,000 as a single person, you don't qualify for the standard amount. Or how, you have to have made at least 3,000 for the year to qualify for the rebate as well. But I also read that if you owe on your taxes, that they take out from the rebate what you owe.

So, like for our family, we fall within the income guidelines, and have two children. So as a married couple we would get 1200 back, and then 300 per child. So 1800 total. But hypothetically, say we owe 2,000 on our taxes....does that mean that we wouldn't get the rebate? But then that doesn't make sense to me either because you have to file by April, but the rebate doesn't come back until May. So for the people that owe on their taxes, they would have paid that in April when they filed. So I didn't get how that would get taken out of the rebate in May if you had already paid it. If that made any sense! LOL

[katcarasella]

If you qualify, you will be paid the rebate regardless of owing taxes or not owing.
They specifically look at the total tax liability of the 2007 year, not taxes or refund due. :)
KFC

[Tink]

Janet, you explained it perfectly.

As long as you've already paid your taxes for this year and fall within the guidelines you mentioned, you should get it. If you end up owing again next year it won't affect that at all. IF you have a refund coming next year, the amount you get in May/June will be deducted from it.

[Gwen]

Thanks guys! I really appreciate you taking the time to answer my questions :) I have been looking all over the internet because of it, thought maybe someone on the forums would know, lol

[catlover]

Wait a minute-I'm confused. HOW does this affect next year's tax return? Wouldn't it just be that, say, if you get a $1200 rebate this year, you'll have to claim it as income next year, right? But it doesn't actually get DEDUCTED from next years refund, does it?

Let's say, hypothetically, I get a $1000 tax refund this year, AND a $1200 rebate. Then next year, I'll claim the $1200 rebate as income (I guess?). But let's say I should get a $1000 refund again next year. I don't have to take the $1200 that I got this year off of my refund for next year and actually OWE money, do I?!!!

[Gwen]

Catlover, I heard that too, but I *think* it's just that you have to claim it as income.

[Tink]

No, sadly, as a "rebate" this is simply an advance on your next years tax refund. You don't get a freebie from Uncle Sam... it's simply a way for the current administration to make people feel they're getting a nice bonus now, so next year IF the democrats are sitting in the White house, the republicans can look good in comparison when people realize they're going to be getting that much less back next year.

You WILL lose that $1200 off of next years refund, but if you have only $1000 due to you, that $200 difference is not going to be owed... they will forgive that.

[Janet]

See how well our wonderful Tink explains things? I would love to have her elegant way of explaining things so simply. Love ya Tink!!

[pearl]

thanks tink, i did not know that at all about it affecting next year. luckily, next year will be the year i don't claim my daughter (her dad will) and i always owe in those years, so looks like the timing is good for me!!!
that's pretty sneaky of the government to not make that clear.

[Gwen]

Wow! Really? Man, I am going to put it in a CD then and not spend it, lol. Next year is finally the year that we will get a tax return because my husband isn't doing that job as a subtractor anymore. I don't want that to get messed up because of that rebate.

[Tink]

Thanks Janet! Right back at ya!

Sounds like a good plan Gwen...