Reading the CNN report, I found this sentence:
"The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time."
Am I reading that right? The money we're getting in May is just an advance of next year's tax refund?
I don't get it!
55reasons
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Well, the IRS refers to it as an advance payment not a tax rebate. Sounds to me like we will be paying this back on our 2008 taxes.
toddrws
yes. That is a advance. Like we got in 2001. So if you work out your taxes that you don't get a refund you will have to pay that amount or it will be deducted from your rebate.that you get in may $600, 1200, ++.
So 100% of it will have to be paid back to the government
So don't get all excitted about the government wasting our money to process all this and hopes that it is free..
Brian J
In 2001, the advance payment was wrapped up in a rate reduction credit so, that advance payment itself was not necessarity taxable (depending on how the rate reduction percentage actually came out once you calculated it).
This time, the main purpose of this rebate is not (at least was not supposed to be) for helping you pay your bills or pay off debt. It was only supposed to be to help stimulate the economy today (to help ward off a possible serious recession). So, if it does turn out that we have to pay taxes on it later, so be it. If it works, and the economy is stabilized, it will have been worth it.
Anonymous
First I heard of this.
It may take a llittle while for the dust to settle on this, but it looks to me like the CNN (and a couple of other reports) were in error and have been retracted. The website below has a good, though not crystal clear discussion
Anonymous
That's not how I understood it (I could be misunderstanding it too). They have been referring to it as a "rebate" on 2007 taxes paid.
This is what I based my info off of: http://www.msnbc.msn.com/id/22782454
Last time they did this they called it an advance...