2008 Tax Return Conundrum: With Funding Dropping, How Will Feds Pick up the Slack?

2008 tax return numbers just aren’t looking good for the government. Year over year revenue has dropped catastrophically, even as spending is up. So how are they making up the shortfall? There’s been some tentative talk of cost-cutting and income tax hikes, but there are some unusual plans that are also in the works:
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2008 Economic Stimulus Payment

What is the Stimulus Rebate?

The 2008 Tax Rebate is an economic stimulus payment that more than 130 million households will receive starting May 2nd, 2008. The rebate will not be taxable nor will it affect your tax liability or refund. To qualify for the stimulus rebate, simply file your 2007 Individual Income Tax return and nothing more. In order to receive a stimulus payment, a return must be filed by April 15, 2008 or October 15, 2008 (with extension) . This payment is automatic and eligibility is determined based on the information provided on your 2007 tax return.

Who is eligible to receive this rebate?

Taxpayers are required to meet the following conditions to be qualify for the stimulus rebate: • must have a valid Social Security Number • cannot be claimed as a dependent on a tax return • have qualifying income of at least $3,000. If you are filing a ‘Married Filing Joint’ return, BOTH people listed on the return must have a valid Social Security Number in order to qualify for the payment. Eligibility for the stimulus payment is subject to maximum income limits. The payment, including the basic amount and the amount for qualifying children, will be reduced by 5 percent of the amount of income in excess of $75,000 for individuals and $150,000 for those with a Married Filing Jointly filing status.

What is Qualifying Income?

For the purpose of the Stimulus Payment, qualifying income consists of earned income such as wages and net self-employment income, Social Security, certain Railroad Retirement benefits, veterans’ disability compensation, and pension or survivors’ benefits received from the Department of Veterans Affairs. Supplemental Security Income is not qualifying income for the stimulus payment.

How much money will I receive?

The IRS will determine your payment based on the information provided on your 2007 tax return.

Click here to calculate your 2008 rebate.

If you are an eligible individual you may receive anywhere from $300 and $600. Taxpayers who have filed a joint return, may receive anywhere between $600 and $1,200. An additional $300 payment will be made for each qualifying child listed on your return that is younger than 17 and is eligible for the Child Tax Credit with a valid social security number.

When will I receive the Stimulus Payment?

Stimulus Payments will be sent out in the order of the last two digits of the primary Social Security Number used on the tax return. Whether you chose direct deposit or a paper check will also determine how soon you will receive your payment. Payments will be directly deposited into your account beginning May 2. Paper checks will be mailed starting May 16.

Taxpayers who file a return after April 15 will receive their Stimulus Payment about two weeks later than the normal schedule.