Back taxes & Pres. Bush's proposed rebate check

[learlywine]

Just wondering and thought y'all might know...I am paying back taxes, messed up my return last year & owed taxes. Anyway, I'm paying those off on a payment plan. I know any refund I get this year will go towards that amount, but if the proposed "rebate" checks get mailed out that the president is talking about, will I get one, or will that go towards my payoff as well? Thanks in advance!

[Rick9972]

Goes to IRS

Sorry

[jq26]

In all likelihood, they will apply it to the tax debt. That is what they did in 2001. This makes sense, because it is a debt that you owe the feds and a windfall originating from the same "creditor". So they apply your tax credit to the tax debt and then send you the balance, if any.

http://www.usatoday.com/money/perfi/columnist/block/2001-06-12-block.htm

Q: What would make me ineligible for the rebate?

A: ....And don't haunt your mailbox if you owe back taxes or child support. The IRS will apply your rebate to those debts.

[Lecasbas]

Paying off the consumer's Bad Debt isn't what the tax rebate is supposed to be about. The purpose is to infuse money into the market so that consumer confidence goes up and everybody starts spending their money which in turn theorectically stimulates the economy.

I'd talk to your local congressman before the IRS gets its bureaucratic hands on your money.

[LadynRed]

That 2001 rebate was a JOKE. I got a whopping $35, and then they turned around and made you pay taxes on it. It was worthless... and I doubt this next one will be of much help either. Won't be paying any sky-high mortgages with it and $35 isn't enough to 'infuse' anything -- except maybe a drink or two at the corner pub !

[Lecasbas]

I personally think this rebate will be a "joke" too. The problem is that this is election year and it would be political suicide to vote against money for the voters.

Not interested in starting a political debate in a credit forum...just thought I'd acknowledge my agreement with the LadynRed.

[jq26]

The 2001 tax rebate was a retroactive annual tax cut. To anyone who paid substantial federal taxes, they received a sizable rebate check. It was very useful! And it remains in effect with the lower tax bracket. So taxpyers benefit every year.

This planned rebate is actually quite sizable. They are talking about $800 for single filers and $1600 for joint filers. It is much appreciated as every April 15th, many hard working wage earners like myself get fleeced.

I don't think it is right to raid the treasury to prop up the markets, so I'd like to see the gov't severely reduce their spending along with it. haha.

The point of this cut is to promote spending and investment. Since the OP is theoretically in a position of less than zero due to the tax debt, using the tax rebate to alleviate a debt rees up money otherwise going to the IRS anyway (with interest & penalties), so it has a net positive effect.

[zfire]

Cranky says..until it's in his pocket, he doesn't have a lot of faith in this rebate deal. I have to agree.

z

[jq26]

LOL. This one looks like it will happen. Too many political forces have a vested interest in keeping the markets afloat.

[Lecasbas]

Original post by: jq26

I don't think it is right to raid the treasury to prop up the markets, so I'd like to see the gov't severely reduce their spending along with it. haha.

I agree, especially with the "haha".

Since the OP is theoretically in a position of less than zero due to the tax debt, using the tax rebate to alleviate a debt rees up money otherwise going to the IRS anyway (with interest & penalties), so it has a net positive effect.

This would depend upon whether or not the IRS will take the op's rebate in addition to the regular payments. Generally, once payments are set up with any institution it can seem to take an "act of congress" to alter them, especially for just one time only. This is why I think the op should contact its local congressman or someone who could answer this question.

It's a little early for the IRS to have info available for this particular rebate but it may have a standard operating procedure in place for contingencies like this.

[Hellard]

Bush promised alot of things..i wouldnt hold your breath waiting..the sad part is I voted for him

[jq26]

It has arrived...http://www.msnbc.msn.com/id/22782454/

The final bill sends checks to people who don't even pay federal income tax. And gives you more based on the amount of children you have.

Great thinking Congress. These people are clueless.

[zfire]

my exact thoughts:evil::evil:

I just had a long discussion with a friend this morning re the fact that people who don't contribute to society get handouts, and when in need ...those who

do their fair share... aren't eligible for anything.

[jq26]

I wouldn't go that far. These people work and contribute. They just don't make enough or have sufficient deductions that effectively zero out their federal income tax liability. Through some of my volunteer tax prep work, I've met many people who work full-time, pay no federal taxes, and still barely makes ends meat.

But this was supposed to be a tax refund. Seems we are stretching the definition for "rebate" when you get a check for something you never paid. And those that pay the vast majority of federal tax get nothing. It phases out at $75k (single) and $150k (joint). They get no "rebate".

Furthermore, this additional per child "refund" is ANOTHER subsidy for having children. Call me crazy, but the first responsibility of having a child is a financial plan to pay for it. Handicapping those who choose to wait is counterproductive.