Mar
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Your Economic Stimulus Payment
March 26, 2008 |
Uncle Sam has decided to give you back some of your money. President Bush and the Congress passed the Economic Stimulus Act of 2008. Every tax payer gets a $600 rebate. The rebate is $1200 if you are filing jointly and you could possibly get another $300 for each qualifying child.
While I’m all in favor of getting my money bank from a corrupt and ineffective bureaucracy, I have to take issue with the cost. You may think I’m talking about the cost of the rebate itself. While it’s true that the US Government has a huge pile of debt and this money could go a little ways towards paying it off, I’m actually talking about the price of the sending out notification letters.
It’s reported that just sending out notification letters cost the IRS $42 million. Can you believe that? Is the IRS really concerned that somebody is going to get a check from them and throw it away? I don’t’ understand the rationale behind the notifications. The rebate program has been in the news for months and I’m sure it will be again once the checks start rolling out.
If the Congress had really been interested in an efficient system they would have passed the bill in time for this to be rolled into the tax system for the 2007 tax cycle. However, through political maneuvering and grand standing this bill was delayed but ultimately passed.
It’s interesting also how the rebate comes in an election year. Is this to remind us good citizens which side our “bread is buttered on” so to speak? If the Congress wants to stimulate the economy they need to work on reducing the national debt, eliminating deficits and cutting taxes. This means cutting the pork barrel spending. I can’t really see this happening in the near future.
What are you going to do with your check? Do you have a new TV in mind? Maybe pay off some credit card debt? How about investing it? I know that’s a radical suggestion and definitely not what the sponsors of this bill had in mind. To “stimulate” the economy, they want you to spend every last dime of this money in Best Buy, Wal-Mart and Target. In fact they would be happy if you spent your rebate check and then took out a second or third mortgage and then spent that.
It seems many of our congressmen (and women) want us to act like sheep. They use the tax code and these petty little hand outs to control our behavior. As long as we keep voting for the incumbents they’re happy. They definitely know how to make themselves wealthy while in office and after their out.
The one thing that most wealthy people fear is the government. We can plan for natural disasters by purchasing insurance. We can hedge our investments and plan for a secure future for our families. However, we can’t protect ourselves against the ineptitude of elected officials. Governments at all levels are a risk to wealth. And yes, both parties are to blame, don’t think one party is necessarily more friendly towards wealth.
My point in all this? Enjoy your refund check; just remember it’s your money and not a “gift” from the government. Use your money to pay off bills or save for a rainy day. I’m going to use the money to pay for a bathroom remodel. It was something I was planning to do anyway. Hopefully that will stimulate the economy.
–UPDATE–
I’ve written a new article to address some of the questions I’ve recieved on the economic stimulus payments. Check it out if you want more facutal information about the stimulus payments.
Article Links
Economic Stimulus Payments Information Center on IRS Website
Calculate Your Projected Stimulus Payment on the IRS Website
Categories Taxes Time Sensitive
Tags Economic Stimulus Government IRS Rebate TaxesRelated Posts
- Is the Economic Stimulus Payment Taxable Income?
- Will There be a Second Stimulus Package or Payment?
- IRS Where’s My Stimulus Payment Web Page
- IRS Economic Stimulus Payment Article Index
- Stimulus Payment: Do My Children Qualify?
Comments
12 Comments so far
Isn’t their an income-based phase-out on the stimulus checks?
Jeff,
Yes there is. You can use the calculator in the Article Links to estimate your expected payment. Phase-outs begin at $75,000 for single filers and $150,000 if you filed jointly. If your income is high enough you might not get a rebate at all.
Sorry I kind of went off on a tangent and letf out some of the details.
Thanks!
If you owe the IRS money for back taxes and for 2007 will you receive the stimulus check or will they put it towards the taxes you owe the government
Belva,
That’s a good question. From the IRS Website:
“All or part of an economic stimulus payment may be applied to back taxes or certain other debts of the taxpayer, such as delinquent child support and student loans. In such cases, the IRS will send a letter to the taxpayer explaining the offset.”
-http://www.irs.gov/newsroom/article/0,,id=180247,00.html
[...] Your Economic Stimulus Payment [...]
I filed separately because my husband owe for child support. will I still be getting the 1200 payment or the 600 payment? And would I be getting the 300 each child?
Karla,
It depends, did you claim the kids or did he?
Here are some examples on the IRS site:
http://www.irs.gov/newsroom/article/0,,id=179642,00.html
You can also use the calculator on the IRS site:
http://www.irs.gov/app/espc/
Thanks
thank you for your fast reply. I have filed both kids,
also I didnt get the second letter that the IRS sent out. I’m I still eligable for the rebate?
My husband and I filed in January and we never received a letter saying we are getting it. I went online to see if we qualify it says we do for 1800.00 The last four didgets of his social is between 00-029. We have not received the payment. I was wondering would there be a reason we are not getting it?
Thanks
I work full time and my husband is on disability. Our combined income is less than $25,000.
We only get $600 stimulus back while most couples are getting $1200. I don’t understand this.
Karen,
The amount you get is based on the amount you actually paid into taxes on your 1040. Less income, less taxes owed that why you may not be eligible for the full amount.
Kelly,
If you filed through a third party and not directly with the IRS you may be getting a paper check. There is a Stimulus status on there (irs.gov) now that if you are getting direct deposit it will tell you when; if you are getting a cehck it will not have your info yet.
Karla,
I dont know of anyone who got a second letter. I think the IRS determined it was too costly to notify people by mail so they posted a stimulus status on thier website. If you filed seperate from your husband, you will most likely get the $600 (not the $1200) but it is actually based on the amount of taxes you paid this year so some arent getting that full amount. Whoever claimed the kids will get the $300 for each child. Next year instead of filing seperately, if you are living together, it may be best to just file an injured spouse form. I was in the same situation a few years ago and we would have got more back filing joint than filing seperate but I just let it go so his child support would be paid and his weekly amount could be reduced. When you file injured spouse they take into consideration your income and your children so they only take a portion of the refund for child support offset.
And last but not least, Belva,
If you owe the IRS or another government agency your stimulus will be offset to cover that debt. However I have found out they dont necessarily take it all. My grandmother only gets social security and filed a joint return even though my grandfather passed away mid 07. They owe a debt to the IRS but because he is deceased I was told be an agent she may get part of the stimulus and only part will be applied to the debt. Thats kind of a wait and see situation. If they do offset your stimulus they will notify you by mail of the amount they applied to the debt.
Hope I helped everyone..Good Luck and God Bless!
my husband owed taxes for 2006 and they were paid back with 2007 tax return. he receive a noticed stating that he would be getting a stimulus refund check. based on his social he would be receiving the check by may 2….i have gone on the irs site to see when the check would be arriving and it states that his social does not exist. what should he do?