Thursday, February 28, 2008

IRS Tax Rebate Checks - Not WHEN, But IF

Unfortunately, the most frequently asked question surrounding the tax rebate checks is "when will I get my rebate check." However, for many, the question should be "am I getting a rebate check?"

Here are a few key bullet points to note regarding the tax rebate checks:

1) As the name implies, they are in fact rebate checks. They are not free money. You must owe tax to receive the rebate. The rebate amounts are not simply $600 or $1,200. They are "the amount of tax you owed up to a maximum of $600 or $1,200" (with a couple of other minor exceptions).

2) You must actually file a tax return in order to qualify. If you typically do not file due to low taxable income or no taxable income, this is the year you need to file a tax return. This holds true for all taxpayers, young and old...from high school and college students all the way up to retirees.

3) Phaseouts start at $75k for a single filer or $150k for a married couple filing a joint return. If you are a single taxpayer earning over $75k or a married couple earning over $150k, you will not receive the full refund. If your income level is high enough, you will not receive a refund at all.

4) Avoid filing extensions for your 2007 tax returns. If you do not file by the April 15th deadline, you will delay the processing of your rebate check since it cannot be calculated until you calculate the amount of tax that is due.


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