Is the stimulus package a tax refund, or temporary lowering of the tax bracket?
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Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date
Is the stimulus package a tax refund, or temporary lowering of the tax bracket? jIM 01-25-2008
Posted by jIM on January 25, 2008, 10:13 am
Assuming a person qualified for the proposed stimulus package, how
will that affect

2007 tax returns?
2008 tax returns?

I understand it will not affect tax returns- my interpretation is the
gov't is temporily adjusting the tax brackets so everyone has $1200
more to spend (married) or $600 more to spend (single) assuming they
are under the income cap.


Some media is reporting this is an advance of the 2008 tax return. If
this is the case, someone which only gets a $200 refund would then owe
the government $1000 6-8 months later.

In addition, some reports suggest this is deficit spending, which
implies they are lowering taxes, not giving an early tax return. What
do the people here understand this stimulus to be?


Posted by kastnna on January 25, 2008, 10:29 am
> Some media is reporting this is an advance of the 2008 tax return.  If
> this is the case, someone which only gets a $200 refund would then owe
> the government $1000 6-8 months later.

How does the media suggest the gov't is going to take it back on the
2008 tax return? Are there going to be changes in deductions, credits,
or tax rates as a result of this stimulus package (not a rhetorical
question)?

P.S. - I have chosen to wait for the dust to settle before really
jumping in, so I am, admittedly, not up to speed on the issue.


Posted by Elle on January 25, 2008, 10:36 am
I do not know about your sources. The several I have read
say the government will literally be sending checks out. You
should have yours (if you qualify, and I am betting you do)
by summer's end. Just a few of many articles reporting on
this:

http://www.nytimes.com/2008/01/25/washington/25irs.html?ref=business

http://www.nytimes.com/2008/01/25/washington/25fiscal.html?ref=business

http://www.nytimes.com/2008/01/25/opinion/25krugman.html?ref=opinion

I can't remember how this is reported on 2008 tax returns. I
do know that it's not a bait and switch maneuver. That is,
the gov. is not going to take the money right back when your
2008 tax return is due. You will keep most or all of it, tax
free.

It's technically a tax rebate, by the way, not a tax refund.
Meaning you pocket the check the fed gov is going to send
you. Or, preferably, you spend it, according to Congress and
the President.


Posted by cmadler on January 25, 2008, 12:17 pm
I seem to recall that last time around they added a refundable tax
credit for everyone. If you recieved the check in the mail, then it
just cancelled out, but if for some reason you didn't get the check
(perhaps you hadn't previously filed taxes), this gave you the extra
credit when you filed.

If it's done this way again, it really does translate into $300, $600,
$1200, etc. above and beyond any tax refund you would normally recieve
(and therefore also an extra burden on the federal budget).

wrote:
> I do not know about your sources. The several I have read
> say the government will literally be sending checks out. You
> should have yours (if you qualify, and I am betting you do)
> by summer's end. Just a few of many articles reporting on
> this:
>
> http://www.nytimes.com/2008/01/25/washington/25irs.html?ref=business
>
> http://www.nytimes.com/2008/01/25/washington/25fiscal.html?ref=business
>
> http://www.nytimes.com/2008/01/25/opinion/25krugman.html?ref=opinion
>
> I can't remember how this is reported on 2008 tax returns. I
> do know that it's not a bait and switch maneuver. That is,
> the gov. is not going to take the money right back when your
> 2008 tax return is due. You will keep most or all of it, tax
> free.
>
> It's technically a tax rebate, by the way, not a tax refund.
> Meaning you pocket the check the fed gov is going to send
> you. Or, preferably, you spend it, according to Congress and
> the President.


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for
a FEW lines to add context, the previous post is deleted.


Posted by Douglas Johnson on January 25, 2008, 6:05 pm
> Or, preferably, you spend it, according to Congress and
>the President.

Which should do a good job of stimulating the economy of China.
-- Doug


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