End Of Tax Year 2008
September 19th, 2010
End Of Tax Year 2008
Question: 2008 Economic Stimulus Payments, Are they just an early tax refund?
Does anybody know the truth?
My brother-in-law told me that at the end of the year, if we were to get a refund for 2008, the refund amount will have the stimulas money deducted from it. This would be saying that the stimulas package is just an early 2008 refund.
He also mentioned that if we did owe for 2008 taxes at the end of the year, that we would be forgiven up to the amount of the stimulas package and still owe the difference. (If this is true, I’m going to raise my deductions.)
Answer: The rebate will not effect your 2008 federal tax liability or refund. The law says the IRS can’t recover any extra rebate payment by reducing your 2008 refund or adding to your 2008 tax bill.
The “rebate” is an advance credit against your 2008 Tax Return (which will be filed in 2009). However, it is calculated based on the amounts shown on your 2007 return. When you file your 2008 return, the IRS will recalculate your “rebate” based on the 2008 amounts. If this results in a larger “rebate”, you will receive a check for the difference. If this results in a smaller rebate, you will not have to repay the difference.
The “rebate” will not increase or decrease any tax refund to which you are entitled. It is an additional refund.
Year End Tax Planning Tips for Consumers
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