What do you need to know about the tax rebate plan?

Congress has passed President Bush’s tax cut plan. However, before you can get your rebate check from the IRS, here are a few things that you need to know.

First of all, the tax cut plan applies to the lower-income and middle class tax payers, senior citizens that live off social security, and disabled veterans. In order to be eligible for the rebate, single individual’s income for 2007 must have an adjusted gross income of $75,000 or less. Joint files must have AGI less than $150,000. Singles will get a rebate for as much as $600, and couples will get a rebate up to $1,200. Couples with dependent children, will also receive a rebate of $300 for each child.

The rebate applies differently for individuals whose AGI is greater than $75,000 and couple’s who have a joint AGI greater than $150,000. The tax cut allows a 5% phase-out rate for those high income people. It means that for every dollar that is above the cap, he or she will lose the rebate by 5 cents. Here is another explanation for those people to figure out their tax rebate. Their rebate will be reduced by the amount of income above the cap times 5%. Here is an example, if your AGI is $80,000, your rebate will roughly be:
$600-0.05*($80,000-$75,000) = $350

In order to get the rebate, the first thing you need to do is to file a 1040 or 1040 EZ federal tax return for 2007. If you can file your federal return by April 15th, you can expect your rebate check between May and Early July. Hopefully, by now you can calculate your rebate check before you actually get it.

http://money.cnn.com/2008/02/08/pf/taxes/rebates_what_you_need_to_know/index.htm?postversion=2008020817

http://www.cnn.com/2008/POLITICS/02/08/economic.stimulus/index.html?section=cnn_latest