[Flafurs] Economic Stimulus checks and what the government may not want you to know about them.

[Xan Steel]

Well, we've all doubtless heard about the government plan to offer checks
for up to $1200 to individuals and families as an effort to spur the economy
into some kind of growth. But what you're NOT hearing is that the money
isn't just being given to us. It's being offered as if it was, but is
actually going to be coming out of our tax returns for next year! In effect,
the government is just offering a loan against your next tax return. But
they're not TELLING anyone this. And the site on CNN that had this
information http://www.cnn.com/2008/POLITICS/02.....lus/index.html has been
removed! and replaced with this one,
http://www.cnn.com/2008/POLITICS/01/24/economic.stimulus/ which makes no
mention of the stimulus package funds coming out of next years taxes. A good
explanation of this is here,
http://biz.yahoo.com/brn/080212/24581.html?.v=1#7 but just in case it's
taken down, I'll cut and paste it all the same.

*What will the rebate mean to my 2008 taxes?
*Will I owe taxes on my rebate amount next year? What if this year my
situation changes and that means my rebate amount should be less?

For most filers, says Luscombe, this year's rebate will appear as a simple
gift from the government. The rebate amounts are tax-free.

But filers will have to reconcile any money they receive this year when they
file their 2008 returns.

"It harks back to the 2001 situation when we got the new 10 percent bracket
and got an advance check for that. Then on next return had to account for
it," says Luscombe. "It's expected to be that way this time."

The2008 tax forms should have a line for the new credit. When calculating
taxes next year, taxpayers will have to subtract what they got as a rebate
check the previous summer.

"Some people might think that's unfair," says Luscombe, "but they got the
money, and they got it early."

One thing taxpayers won't have to worry about is giving back any excess if
their 2008 taxes show that the advance this year was actually more than they
should have received.

"If it turns out that credit on your 2008 return is greater, you get to take
that additional amount," says Luscombe. "If it's lesser than what you got in
2007, you don't have to refund that back to government." The law says the
IRS can't recover the extra payment by reducing your 2008 refund or adding
to your 2008 taxbill.


In short, that means that your 2008 tax return will be negative whatever you
received in your economic stimulus, unless you would be getting back less in
your next return, than you got, (it won't make you owe money, you just won't
get anything back if you earn less than you'd get in this check.) So if you
got a stimulus check for say $800, and your next tax return was for $1200,
you'd only get to keep $400 of it because you'll have to pay back what
you're "borrowing" as part of the stimulus package. But if your return is
only $600, you won't have to pay the $200 difference because your return was
lower than the stimulus check.

I urge anyone thinking of taking this money, to do any research you can into
it, to see if this was taken down from most places because it's incorrect,
or if it's been taken down because the government doesn't want it public
knowledge that this is something that will eventually lead to us losing as
much as we're "given", from our next years taxes.
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