Saturday, January 26, 2008

Read It And Weep

From a Q&A at ABC News:

Question: "Tax rebate. Sounds good on the surface but last time Bush and company gave us a rebate we had to deduct it as income on our taxes the following year. Smoke and mirrors people, smoke and mirrors. This is a temporary fix in an election year, nothing more. The only real fix is to dump the present tax system and make Washington stop spending like drunken sailors on leave. It's not their money, it's ours. I guess as long as we continue to re-elect the same losers we can expect more of the same."

Linda from Florida

McPherson [ABC News expert on the subject]: Linda, The tax rebate as proposed actually amounts to a tax cut on your 2008 income even though it is based on 2007 figures. The proposal calls for cutting the federal income tax rate on the first $6,000 in income for individuals and the first $12,000 for couples from the current 10-percent rate to zero percent.

The rebate proposal assumes you are having federal income taxes withheld from your paycheck now based on the current 10-percent rate. Think of the tax rebate actually as an advance on next year's tax refund.

All the details remain to be worked out, but I think it's safe to assume any tax rebates received this year will come into play when completing your 2008 return in early 2009.
Ain't no free lunch here folks.

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