Life Support - Tax Facts
Tax Rebate Moment of Truth: What It Is, and What It Isn't
A Tax Fact from The Tax Institute at H&R Block
On February 7, 2008, the Congress approved an economic stimulus plan aimed at boosting the economy and avoiding a recession. The Economic Stimulus Act of 2008 was signed into law by President Bush on Wednesday, February 13.
Now what?
In short, 130 million, that's right, 130 million Americans will begin receiving tax rebate payments as early as May of this year, with nearly all tax rebates delivered by the end of this summer.
And, the majority of Americans who qualify for the tax rebate payment will not have to do anything other than file their 2007 tax return to receive their tax rebate this year. Sound easy? It is. You don't have to complete any applications, file any extra forms, or call the Internal Revenue Service to request a tax rebate; you will receive it automatically. The IRS will determine eligibility, compute the amount and issue you the rebate.
So, what exactly is a tax rebate?
The tax rebate, also known as payment, is an ADVANCE CREDIT for tax year 2008 and will be calculated on your 2008 return when you file in 2009.
Now listen carefully because this is important: you are receiving a portion of your 2008 credit EARLY and if you receive it once, you won't receive it again when you file your 2008 return.
And, this is important too: if you're due a higher rebate, you'll get the remainder next year when you file. If you received a higher rebate than you should have, you DO NOT have to pay it back.
What a Tax Rebate Isn't
A tax rebate is not interest, it's not income, it's not a dividend. Pure and simple, and this is worth saying again, the tax rebate payment is an ADVANCE CREDIT for tax year 2008 and will be calculated on your 2008 return when you file in 2009.
Will the Tax Rebate affect my 2007 tax return?
No, the tax rebate has no effect on this year's return. However, with that said, the AMOUNT of your tax rebate DOES DEPEND on your information from your 2007 tax return that the majority of Americans will file by April 15, 2008.
But here's the best advice: you gotta file a 2007 return to get the tax rebate THIS year.
For more information about tax rebates and how they affect you, check out www.digits.hrblock.com from H&R Block, America's tax leader since 1955. You'll find a library of tax rebate audiocasts, "Frequently Asked Questions" and answers, the free and easy-to-use Tax Rebate Calculator, late-breaking news, as well as blogs from tax researchers at The Tax Institute at H&R Block - feel free to join the conversation. See you at www.digits.hrblock.com
This Tax Fact is brought to you by The Tax Institute at H&R Block.
To view other helpful tax information or listen to our Tax Fact podcasts, visit www.digits.hrblock.com
As always...everyone's tax situation is different, so be sure to consult a tax professional or financial advisor before making important financial decisions.
This Tax Fact is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice, nor is it intended to be used to avoid IRS penalties.
A Tax Fact from The Tax Institute at H&R Block
On February 7, 2008, the Congress approved an economic stimulus plan aimed at boosting the economy and avoiding a recession. The Economic Stimulus Act of 2008 was signed into law by President Bush on Wednesday, February 13.
Now what?
In short, 130 million, that's right, 130 million Americans will begin receiving tax rebate payments as early as May of this year, with nearly all tax rebates delivered by the end of this summer.
And, the majority of Americans who qualify for the tax rebate payment will not have to do anything other than file their 2007 tax return to receive their tax rebate this year. Sound easy? It is. You don't have to complete any applications, file any extra forms, or call the Internal Revenue Service to request a tax rebate; you will receive it automatically. The IRS will determine eligibility, compute the amount and issue you the rebate.
So, what exactly is a tax rebate?
The tax rebate, also known as payment, is an ADVANCE CREDIT for tax year 2008 and will be calculated on your 2008 return when you file in 2009.
Now listen carefully because this is important: you are receiving a portion of your 2008 credit EARLY and if you receive it once, you won't receive it again when you file your 2008 return.
And, this is important too: if you're due a higher rebate, you'll get the remainder next year when you file. If you received a higher rebate than you should have, you DO NOT have to pay it back.
What a Tax Rebate Isn't
A tax rebate is not interest, it's not income, it's not a dividend. Pure and simple, and this is worth saying again, the tax rebate payment is an ADVANCE CREDIT for tax year 2008 and will be calculated on your 2008 return when you file in 2009.
Will the Tax Rebate affect my 2007 tax return?
No, the tax rebate has no effect on this year's return. However, with that said, the AMOUNT of your tax rebate DOES DEPEND on your information from your 2007 tax return that the majority of Americans will file by April 15, 2008.
But here's the best advice: you gotta file a 2007 return to get the tax rebate THIS year.
For more information about tax rebates and how they affect you, check out www.digits.hrblock.com from H&R Block, America's tax leader since 1955. You'll find a library of tax rebate audiocasts, "Frequently Asked Questions" and answers, the free and easy-to-use Tax Rebate Calculator, late-breaking news, as well as blogs from tax researchers at The Tax Institute at H&R Block - feel free to join the conversation. See you at www.digits.hrblock.com
This Tax Fact is brought to you by The Tax Institute at H&R Block.
To view other helpful tax information or listen to our Tax Fact podcasts, visit www.digits.hrblock.com
As always...everyone's tax situation is different, so be sure to consult a tax professional or financial advisor before making important financial decisions.
This Tax Fact is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice, nor is it intended to be used to avoid IRS penalties.
