prancingbull.com

In a previous post on the Economic Stimulus checks, I noted that I would not be getting one because I was listed as a dependent on my parents 2007 tax return. My girlfriend also had the same status on her tax return, as she was a dependent on her parent’s return as well. The other day she received a letter from the IRS stating that she should be receiving her stimulus check within the next few days. If it didn’t come by then, she should expect it within six weeks. I find that interesting, because I did her return for her, and there is no reason why she should be getting one. It will be interesting to see if I receive the same letter from them, because we had the same filing status.

According to the letter that the IRS sent me earlier this year in regards to the stimulus checks, they said, “In addition, individuals cannot receive a payment if they can be claimed as a dependent of another taxpayer…” It seems as if we would both fall under those guidelines. I am curious to see if I get a letter from them about the same thing. I wouldn’t mind getting a stimulus, expecially since I just blew $200 buying Windows XP. Oh well.

A visit to the US Treasury website will show you a state by state breakdown of how the Economic Stimulus Act of 2008 will affect Americans. The US Treasury estimates that 131.8 million Americans will benefit from this act, with California being the state with the most affected at 14.7 million people. The US Treasury projects that the total reduction in income taxes paid will be $112 billion. This equates to $849 per affected person.

$849 per person seems a bit high, since each parent can get up to $600 with a $300 credit per child up to two. I guess these results suggest that there are quite a few single parents out there with two kids or more. The US Treasury gives a probable reason for this discrepancy on the report. They say that “The proposal extends tax benefits to significant numbers of tax units that did not file during calendar year 2007. The estimates for these units are based on the characteristics of filing units and are therefore subject to greater standard errors and bias.”

You can see the entire two-page pdf report here.

Many people may be wondering how much exactly they will be getting. The US Treasury has a nice five-page pdf file that shows how much money a person will receive under just about any imaginable scenario. You can view the report here.

This post is a follow-up to the article I wrote a few weeks ago about the Government Rebate Checks. Yesterday I, as well as millions of other Americans, received a letter in the mail from the IRS outlining the Economic Stimulus Act of 2008. It stated that the government would start sending these one time payments out in May. The great thing about this rebate is that you don’t have to fill out any additional paperwork. All you have to do is submit your yearly tax return, and the IRS will determine your payment from that.

A single person is eligible for up to $600, and a married couple is eligible for up to $1,200. Up to two dependants can be claimed for $300 each. The largest payoff would be to a married couple with two dependants. They would be eligible to receive $1800. Depending on your income levels and other deciding factors you may not be eligible for the full amount. The IRS has created a refund calculator on their website and can be found here.

There are a few people that the government will be leaving out in the cold though.

• If your adjusted gross income is over $75,000 (or more that $150,000 if married filing jointly), the payment will be reduced or phased out completely.
• You must have a valid Social Security Number to qualify for the rebate.
• Individuals who can be claimed as a dependant of another taxpayer cannot receive the payment.
• Taxpayers who filed a 2007 form1040NR, 1040NR-EZ, 1040-PR or 1040-SS will not be eligible.
• A dependant over the age of 17 will not qualify for the additional $300.

One thing that frustrates me about this plan is that is does not consider college students. First of all, the parents who are most likely supporting the student (and claim them as a dependant) will not be receiving the $300 bonus. Also, college students (many who work during the school year) also will not be able to qualify to receive the $600 check. I’m sure there are quite a few people who are with me on this one.

For all the nitty gritty details that only the IRS can provide, click here for the official IRS page for the Economic Stimulus Act of 2008!