2/28/08

File tax return to qualify for stimulus rebates

Now that the economic stimulus plan has been approved by Congress and signed into law, we’re all waiting for those checks to show up in our mailbox. Judi Blake of Jackson Hewitt Tax Service offers some tips to make sure you qualify for the rebates.

“In order to receive a rebate check, people must file a tax return,” Blake explained, “even if they have no taxable income.”

The rebates are generally based on tax liability, but even those who don’t pay taxes but have $3,000 or more in qualifying income may still receive a minimum payment of $300 for single filers and $600 for joint returns.

For most taxpayers, the stimulus checks will be equal to the tax liability on 2007 tax returns, up to a maximum of $600 for individuals and $1,200 for joint filers. Qualifying households with children will receive an additional $300 per child, subject to income level phase-outs.

Blake added, “Income that’s eligible for rebate payments includes wages, self-employment income, Social Security payments, certain railroad retirement benefits, veterans’ disability compensation, and pension or survivors’ benefits received in 2007.”

The stimulus package also includes incentives for businesses and some relief for the hard-hit housing market.

The plan increases the limits on home loans that can be purchased by Fannie Mae and Freddie Mac, the government-sponsored finance companies. It’s expected that the one-year increases will make it easier to refinance loans or obtain new mortgages, although the program will vary depending on the local market.

Business incentives include a doubling in the amount of depreciable capital expenditures businesses can immediately write off, from $125,000 to $250,000.

The IRS expects to issue more than 130 million rebate checks starting in May, at a cost of approximately $168 billion over two years. For more information, or for help in filing a 2007 tax return, contact Jackson Hewitt at (360) 653-8870.