Rebate check under Economic Stimulus Act of 2008

[RRK]

The deal goes something like this: just about anyone who earned a paycheck in 2007 gets at least $300 back from the IRS; many will get rebates of $600 each, or $1,200 per couple. If you have children who qualify as dependents, you get another $300 for each child. If you earned at least $3,000 last year, but not enough to pay income taxes, you still get $300.

So far, so good. The rebates “phase out” for people who earned $75,000 or more and filed an individual return; the limit is $150,000 for couples who filed jointly. The phase-out clips your check by five percent of any amount over those limits. So if you’re single and earned $80,000, you’ll get: $600, minus five percent of the $5,000 you earned over the $75,000 limit ($250), which leaves you with $350. That effectively caps eligibility at $87,000 in income for singles and $174,000 for couples.

If you earned more than those limits in 2007, you get nothing. Unless you have kids, in which case you get $300 per kid. But you could lose that too if you earned enough to burn off your child credit with the 5 percent phase-out. That would happen to a married couple with one child that earned $180,000 last year; the first $24,000 over the limit would burn up their individual credits and the next $6,000 would eliminate the $300 child credit. (Still with us on this?)

Rebates for married couples are based on a joint return. So if you and your spouse together earned $95,000 and paid more than $1,200 in taxes, you’ll get a check for $1,200 for “individual” credits — even if one spouse earned a lot less than the other. If you and your spouse only paid $750 in taxes (less than the $1,200 rebate limit), you only get back $750.

Retirees are also eligible — as long as they paid taxes. So if your income came from other sources, like pensions or Social Security, you’ll get a rebate based on how much you earned and how much you paid in taxes. (If you’re living exclusively off tax-free municipal bonds, on the other hand, and you didn’t pay taxes, you don’t get a check.)

For more handy examples, check out the Treasury Department’s Web site.

Keep in mind this rebate has nothing to do with the refund you may be owed from having too much withholding taken from your paycheck. The rebates won’t effect that refund. If you owe taxes, you can just give your rebate back to the government and they’ll use it to pay your bill.

The Treasury figures that something like 117 million families are in line for $103 billion worth of checks — but only if the Senate goes along with the plan worked out by the White House and the House. It’s hard to see how any
Senator in an election year would block the plan.

But hey, it’s the Senate. So until you see a picture of President Bush signing the law, don’t spend the money just yet.

Source:
http://www.msnbc.msn.com/id/22847238/


What do you all think about this handout ? Does it really help the economy ?
I feel govt should not be doing this.

more reference:
http://www.irs.gov/newsroom/article/0,,id=179181,00.html

how much do I get calculator:
Economic Stimulus Calculator

[sftrade]

Im sure lot of desis will use the handout towards subsidizing the airline ticket to India during peak summer season.

[Suri]

I find the handouts pretty substantial. Hey, it's the election year, isn't it? It should sail thru the senate. Yes, it is pandering - it definitely helps people, for e.g. pays a months rent/mortgage, but sets a bad precedent.

[manuchabria]

I will take free money anytime.

[Chicago Desi]

What do you all think about this handout ? Does it really help the economy ?
I feel govt should not be doing this.[/quote]

I agree with Suri. This is BAD public policy and highly populist measure by Dubya. This shows that there is very little to choose from between the GOP and the Dems when it comes to public policy. You would think that the GOP would embrace more free market economics measures. The hole in the economy just keeps getting deeper and deeper.

These guys are making Reagan look like a rockstar. Perhaps, he was!

On the personal front, I will take the money. Its money that we had written off anyway. So it is extra money in the pocket.

What would be the best way to invest this money? Buying electronics is one way to spend it, which is what most americans will do. But if we were to invest, what would be the best way?

[eeyore]

CD,

Invest it in VTSMX and fuhgeddaboudit.

[vivmat]

Beware of fraudulent emails and phone calls regarding this refund. I have already recd. a couple emails and have heard of folks receiving phone calls.

The usual "give us your bank account and we'll deposit the refund" deal or the email that leads you to a fraudulent website (check URL) and gets all our info.

[KRV]

What do you all think about this handout ? Does it really help the economy ?
I feel govt should not be doing this.[/quote]

RRK,

In my simplistic view, there are 3 pools of money - Government, Business and Consumers. In any given year, these three entitites carve out what they make for the year as a whole. If Govt. decides that Consumers need a break, it is giving away a small portion of its take to them hoping most of it is spent, i.e. it flows into Businesses (so, bailout flows from Govt. --> Consumers --> Business --> hoping for Growth). But the equation is not that simple. The last time they did this (2001?), data shows only about 30% of the handout are spent by consumers back into the US economy. Anyway, I am all for a plan that reduces the Government's take and puts some of it back into Consumers - especially this Government. As someone said earlier, it is election year and such gimmicks are to be expected. :emsmiled:

[Piyawajiran]

I like the free money. I'd rather pay some of the credit card debts. I do not understand what is wrong about this policy

[realentity]

Wish I keep getting more free money during the year. Will remit the entire amount to my State Bank account and contribute towards my R2I bucket.

https://www.onlinesbi.com/glsus/