On February 8th I wrote about the Bush Tax Rebate and what people could expect. Bush signed H.R. 5140, the Economic Stimulus Act of 2008 into law on February 13th. Being an inquiring mind I have sifted through and dug out the answers to questions I wanted answered. I have summarized them below. If you want to see the full IRS article because the information you need has not been listed, click here.

1 – Will I have to claim the rebate as income on my 2008 taxes.
      NO! The tax stimulus rebate will not count as income when you file your taxes in 2008, it will not be  used to increase your taxable income.

2 - Will my refund be reduced if I owe any current or back taxes?
      YES! In this case it would be treated like any other refund and would be first applied to any outstanding liabilities owed to the IRS.

3 – When will I get my rebate and how?
      The IRS hopes to begin distributing the stimulus rebate by May. People who recieve their refunds or make payments directly from their bank accounts will get the refund quickest. If you use direct deposit and chose to use the multiple account option , it will be allocated as you specified or your refund.

**Updated to include elderly and disabled veteran rebates**
Assuming democrats don’t mess things up, chances are this is how its going to break down:

Under the agreement announced by the White House, individual taxpayers who earned enough to pay federal taxes would get up to $600 in rebates, working couples $1,200 and those with children an additional $300 per child.

The Bill sent to President Bush would give $300 tax-rebate checks to those whose Social Security benefits, veterans’ disability payments and earned income totaled a minimum of $3,000 last year.

Adjusted Gross Income is more than $3,000 but owed little to no taxes would get $300 or $600 for couple + $300 per child

Adjusted Gross Income is less than  $75,000 , rebate would be equal to the taxes paid in 2007 up to $600 + $300 per child

Adjusted Gross Income for couples less than $150,000 , rebate would be equal to the taxes paid in 2007 up to $1,200 + $300 per child

 For people who exceed these limits the rebate is reduced by 5% for every $1 over the limit. Example, if you made $85,000 you would be $10,000 over so $10,000 x .05 ( 5% ) = $500. $600 – $500 = $100, which would be your rebate. The plan would allow for people not eligible based on 2007 income to qualify again in 2009 based on their 2008 taxes. The government hopes to start sending rebates in mid-may and complete payments in 10 weeks.

 Finance.Yahoo.Com – Click for Complete Story

Who says the IRS is not your friend. There will be several changes for tax season 07′ that may save you money or let you earn more without paying more in taxes.

1) The Personal and dependency exemption increases to $3,400 from $3,300.

2)The taxable income seperating the 15% bracket from the 25% bracket for married filing jointly will be $63,700, up from $61,300. 

3) The standard deduction is up $400 to $10,700 for married filing jointly,  $5,350 for married filing seperately, and up $300 to $7,850 for head of households.