It's official! President Bush has signed a $168 billion economic stimulus package that will give tax rebates to millions of Americans. You may have heard about all the hoopla going on in Washington, but what kind of rebate you’ll get -- and when it’ll arrive in your mailbox -- had been a matter of debate.
What the stimulus plan means for Nesties
Simply put, if you don’t make too much (or too little), you might be getting a check in the mail. In order to receive a check, you must file a tax return. Originally, those who qualified for a rebate were not going to see a penny until late spring or early summer; however, the government has started directly depositing rebates into taxpayers’ bank accounts as of Monday, April 28. President Bush hopes the payments will help jump-start the flailing US economy.
Here’s the breakdown of who will get a check and for how much:
Up to $600 for individuals who had an adjusted gross income (AGI) of up to $75,000 last year.
Up to $1,200 for couples who had an AGI of less than $150,000 and filed jointly.
Those who didn’t earn enough to pay federal income taxes but made more than $3,000 in 2007 get $300 per individual or $600 per couple.
Families who meet the income guidelines will receive an additional $300 amount per child.
Payments to higher income taxpayers will be reduced by 5 percent of the amount of adjusted gross income above $75,000 for individuals and $150,000 for those filing jointly. (For more information and the latest updates, see the IRS website.)
How it works
You may ask how handing out millions of checks for hundreds of dollars will produce a better economy -- especially when the government is already $250 billion in debt. Dominic Rovano, a manager at a certified public accounting firm in New York, breaks it down in plain English. “By giving consumers some extra cash, government officials are hoping that they pump this money back into the economy. Whether they spend it on luxury items or everyday bills, the hope is that the money spent by consumers will give companies that receive the cash a much-needed boost and, in turn, stimulate job creation.”
But what if you’re not planning to use your extra cash for a shopping spree, but rather to pay off debt, save, or invest? Ravano still sees it as a positive: “You’re bettering your financial situation, and we all know that we spend more money when we’re better off financially.”
The government will make over 800,000 direct deposit payments from Monday, April 28 through Wednesday, April 30. On Friday, a large batch of 5 million direct deposit checks will be sent out. For Nesties waiting on a paper check, they will start being mailed on May 9, a week earlier than previously announced. All rebate checks for those who filed tax returns on time should be received by July 11 of this year.
When to expect your direct deposit
The government processes rebate checks based on the final two digits of your social security number. People having their checks directly deposited into their bank accounts with a Social Security number ending in -00 to -20 will have their economic stimulus payment deposited to their bank account by May 2. Those with Social Security numbers ending in -21 to -75 will get their direct deposits by May 9, and people whose Social Security numbers end in -76 to -99 getting their deposits by May 16. If you’re filing jointly, the rebate check will be deposited according to the final two digits of the person’s social security number whose name is listed first on your return.
So tell us -- if you’re getting a rebate, how will you spend it? Will you stash it away or buy that 42-inch flat screen you’ve been eyeing?
by Caitlin Losey with additional reporting by Lauren Le Vine
7/2/08
See more:
Money,
money q&a,
Taxes