Wednesday, January 30, 2008

Tax Rebates to Complicate Tax Filing in 2009

As Congress works to iron out the details of an economic stimulus package, many people are already predicting complications for tax day on April 15, 2009. If approved, the stimulus proposal would take the form of checks to be sent out this spring. However, they are expected to be advances on a one-year tax cut in 2008. The IRS is going to use data from the 2007 tax year to calculate each households check. Adult taxpayers are expected to receive between $500 and $600 and there is also going to be a $300 per child credit. Therefore households with two parents and two children could get as much as $1,800 from the federal government.

Unfortunately, since the IRS is using 2007’s data there are going to be some problems for individuals passing the age of being a qualified child in 2008. In these situations the parents will be mailed a check this Spring that they will have to repay come next year’s tax filing season. Additionally, if a taxpayer's child passes away during the year they would also have to return the money.

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