Feb 26, 2008

The Economic Stimulus Rebate

QUESTION: My mother-in-law and her husband file every year by TurboTax. This year they will owe the IRS. However, TurboTax will not know about the tax rebate to deduct the rebate from their balance. How should they go about paying their liability and how will the IRS apply the rebate? Is it as simple as them paying their balance and then receiving a rebate later (for whatever amount it may be) once their return is filed and processed?

ANSWER: Great question. The rebate has no bearing on the tax balance due or refund due on this year's return. Rather, once the return has been processed the rebate amount ($1,200 if filing a joint return) will be processed and mailed to them. When they file their 2008 return, the amount received as a rebate is to be incorporated in the return. But this amount is not taxable income for 2008 nor will it reduce a potential refund or increase tax owed on the return.

1 responses:

taxconsultant4u February 27, 2008 at 8:03 PM  

Thanks for this info! I know a lot of people were wondering how this rebate would effect their 2007 and 2008 taxes.

  © Blogger templates The Professional Template by Ourblogtemplates.com 2008

Back to TOP