Will the proposed tax rebate actually be a rebate…or will it be an advance on next years tax refund like the last ‘rebate’?
Is this money I already paid, or money I will have to give back?
I’ve read and heard about six different things about this, and it seems to me that it’s actually JUSt like the last one, where it’s an advance that you have to report on next year’s taxes.
So…woo hoo. I’m going to pay my BP bill.
What is a BP bill?
So they are planning to bail people out because they borrowed too much by . . . letting them borrow more? Please tell me I am misunderstanding something.
If you only have to report it as Taxable Income, then it’s a nice peiece of change in your pocket, net.
British Petroleum, I’m guessing. Gasoline credit card.
Cash is cash. We’ll probably blow ours on some new stuff for the kitchen, or maybe some new sheets.
Yes, BP is our BP credit card. As of late it’s cost us well over $50 to fill our tank once a week.
Yeah, these are the things I don’t understand. I just hand in all my tax documents to the accountant. The last time my husband and I did our own taxes, both of us ended the night in separate rooms, crying.
It’s probably like the last Bush “tax rebate”, though- you get your money now, but it comes out of your next refund.
What about the self-employed? I paid plenty of taxes last year, but my small business showed a very small loss (less than $100), so for the first time in years I paid no federal income tax. However, I paid plenty in sales tax, gas tax, etc.
How do they defne “taxpayer”, “earned a paycheck” and “people who paid taxes”.
I am all of the above. I am also self-employed and currently have barely any work, so am paying more in health insurance premiums than I am earning right now.
Am I excluded from this “rebate”?
Workers earning more than $3,000 a year qualify, but they only get $300 back if they didn’t pay any taxes, with an additional 300 per child.
How do they define “worker”? Or “earned”? How does this apply to the owner of a small business who took a loss last year? I certainly worked, and for sure didn’t ask for or get any welfare, public assistance or food stamps, nor was I on unemployment. Where do I fit in?
I guess you’d have to look at your tax return- I’m not familiar with a self-employed situation. Is there a line that states what your wages were?
No, I file a Schedule C, business income or loss.
The last rebate wasn’t taxable income. It was a refund of taxes paid, and you didn’t have to put it on your following year taxes anywhere. Now, it was a refund of taxes paid in 2001 (from your payroll deductions), so in essence it was money you could have just got back at the end of the year from your refund, but for political reasons they sent everyone a check in the summer. I prefer that - the IRS wants me to pay quarterly, it’d be nice if they refunded quarterly too. My money is worth more in August than it is in April.
I did data entry at the IRS the following tax season and a few forms came in with the rebate listed as “other income”. Most of the time, the tax examiner corrected these and took them out. Some people’s slipped though, probably, and they paid extra tax foolishly. I suppose if you got a bigger check than you actually ended up owing taxes for 2001, there might have been something to report (ie, you got paid based on 2000 income, but only made $2500 in 01) but I certainly don’t remember.
The last rebate was the result of the creation of a 10% tax bracket, so the rebate was to correct what turned out to be excessive withholdings in the first part of the year (when the
lowest bracket was 15%). I don’t understand yet where this “rebate” is coming from this time around. There doesn’t seem to be a new tax bracket created, and the 10% bracket was not removed. Since it phases out at a certain income level, and it applies to those who do not owe taxes, I guess this is in essence prepayment of a tax credit. So instead of putting a line on the 2008 1040s to claim this credit (which would work like the EIC and allow you to get a refund even if it exceeds your total tax), they’ll just send you the check this summer. Works for me, I guess. I’d rather have it now instead of next year, and I’ll just put it right in the bank which is exactly what I’m not supposed to do with it I suppose.
Which makes it NOT a rebate, but an advance on what I would have already gotten. I was offended that they used the word ‘rebate’.
It IS a rebate, for most people, since the tax system is a pay as you go thing. You end up paying estimated taxes all year long (it’s called withholding for most of us), and they are “rebating” that money earlier than they would have if they simply changed the tax schedule resulting in a larger refund than you already were expecting. 
At least according to today’s NYTimes, the plan has not been finalized. The Senate can still make some changes. And despite the do-somethoing-anything-theres-an-election-coming mania, there is still a bunch of contention on how best to accomplish the stimulus goal.
So detailed discussions of what the exact terms are or are not seem a bit premature.
IANAA.
In my experience, with a small business you’re better off paying yourself a nominal salary, rather than just taking the entire profit (or loss).
Hey guys, I haven’t found anything online other than this thread to suggest that the rebate will be anything other than actual extra cash recieved that, without the stimulus package, would not otherwise have been rebated. This is contrary to what seems to be the consensus on this thread–that the rebate is just part of the rebate you would already have recieved, and that next year’s rebated amount will be reduced by the amount recieved through this stimulus package rebate.
Where can I find authoritative information about this rebate, that makes it clear which of the above two scenarios actually obtains?
-FrL-
This appears to be the actual bill in question. It changes the lowest tax bracket from 10% to 5%, and allows for an advanced rebate. So it’s pretty much the same as the last rebates.
I haven’t seen anything that suggests that this payment is similar to the one in 2001 either. Back then some people referred to the payment as a “prebate” because it was simply money you would have gotten back anyway when you filed that year’s return. That is, your eventual tax refund was likely smaller because they had already given you part of it. Nothing I have read about the current proposal suggests that that’s the case this time.