Senate Accepts President Bush's Tax Rebate Plan

The Senate has accepted President Bush's rebate plan / stimulus package proposal. However, the final word on formula and amounts is still up in the air. Some senators are drawing up their own proposals with different amounts and income caps. As of today, February 9, 2008, the following is the proposed rebate plan amounts.

If you are a single adult who reported a 2007 earned income of at least $3,000 and you have an income tax bill of between zero and $300, you will receive a $300 check.

Individuals who receive social security or disabled veteran benefits who have $0 in income tax will receive a check for $300.

Now, for singles with an income tax of between $300 and $600, they will receive a tax rebate in that particular amount. Let's say their tax was $468. Then their rebate check will be for $468.

For singles with 2007 income taxes amounting to $600 or more, they will receive a $600 rebate check.

Along those same lines, married couples who file jointly and have income tax of at least $1,200 will receive a $1,200 rebate. Checks will be smaller if their income tax payments were less than $1,200. Let's say a married couple's income tax was $957. In that case, they will only get $957 in a rebate. However, their rebate check amount will not be less than $600. So, if the married couple had an income tax bill of $450, they will still receive a check for $600.

For married couples with income taxes amounting to more than $1200, they will not receive more than a $1200 rebate check. Example: if you as a couple filing jointly had income taxes amounting to $1450, you two will only receive a rebate check in the amount of $1200.

In addition to the above rebate guidelines, singles and couples with children will receive an extra $300 per child. Keep in mind that there are proposed caps on the number of children and amounts.

Furthermore, higher income tax payers will have different rebate amounts. Singles who have adjusted gross incomes between $75,000 and $87,000 may receive partial rebates (amounts lower than the above listed rebate amounts). Singles who make more than $87,000 will not receive any rebate.

Married couples filing jointly who have an adjusted gross income between $150,000 and $174,000 are also negatively affected. In that income bracket, married couples will receive a lower / partial rebate amount. Couples who have income of over $174,000 will not receive any rebate.

Ever since it was announced that Americans will be getting a tax rebate this summer I've been hearing happy and joyous stories. I'm hearing individuals and singles say they will be spending the money on new TVs, new furniture, new cars, while others are going to use the money to pay off credit cards. I've even heard people say they will be putting their rebate check into their savings account.

The IRS will be mailing rebate checks out beginning in May.

Sources:
"Congress OKs Rebate Checks." Gail Chaddock, The Christian Science Monitor.

"Information on Stimulus Package." Internal Revenue Service.