Govnt stimulus not free money......but yours
Do you know what the economic stimulus really is?
You know - That so called money the Gov’nt is giving you...
I was talking with my tax people -HR Block guy and the stimulus package came up. He informed me that most people don't realize that - that money they will give you in July - is an advance on your tax rebate next year.
So what the government is doing is basically giving you the money you would get at the end of the year - in July. What happens is, people don't realize that it's not free money and when the end of the year comes they get mad when they find out that the usual amount they get every year will be less due to the money they gave you early this year in advance.
What burns me, is that they don't tell this to the people and just say - here is money go spend it so the economy [ mostly the rich ] wont collapse. So while people think it’s free money in truth it's not - you better not be counting on your tax refund to bail you out of any year end debts because the more you get in July - the less you have in your rebate…..
What do you think?
Comments
I initially thought the same thing but then visited the IRS website to clear up some questions.
Based on the answers found in "Stimulus Payments: Answers to Frequently Asked Questions" on the IRS website (see: http://www.irs.gov/newsroom/article/0,,id=179181,00.html), this tax rebate will be "free money" for most eligible individuals since (i) it will Not be considered taxable income for 2008 income tax purposes and (ii) it "will not reduce or increase your refund when you file your 2008 return."
I said "most" instead of "all" eligible individuals because I did not figure out each possible scenario and payment outcome. For instance, according to the same Q&A page, if you still owe federal income tax on a prior year, then the IRS would automatically apply the stimilus payment to pay that outstanding balance. In any case, if you're eligible to receive the stimulus payment, it is more than likely that it is going to be free money and not a loan for you.
Hope this helps.