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Posted by Ed on March 4, 2008, 8:53 pm
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I presented an unlikely scenario where a single person has AGI of
$8749 and a tax liability of $1 and asked what the rebate would be. I
got four different answers:
The answer depends on the amount of earned income, i.e., wages,
salaries, or net self-employment income.
$1
$300
$301
It is obvious that there is disagreement even within this august
group.
What I'm looking for is an explanation of the program that is free of
IRS-speak and CPA-talk (sorry) and is written in plain simple English
that the ordinary Joe and Jane Taxpayer can understand.
If I could find that, (or be able to understand the program so I could
write it myself) I would go away and not bother you anymore. I'm not
trying to publish a paper, I just want to be able to clearly and
accurately explain the program to clients.
Thanks for your patience,
Ed
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Posted by Tom Russ on March 4, 2008, 10:04 pm
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> I presented an unlikely scenario where a single person has AGI of
> $8749 and a tax liability of $1 and asked what the rebate would be. I
> got four different answers:
Well, judging from the examples at the IRS web site, the correct
answer should be $300:
<http://www.irs.gov/newsroom/article/0,,id=179169,00.html>
>
> What I'm looking for is an explanation of the program that is free of
> IRS-speak and CPA-talk (sorry) and is written in plain simple English
> that the ordinary Joe and Jane Taxpayer can understand.
Does the basic on-line explanation from the IRS fit the bill? It's
aimed at ordinary people*, or does it still have too much IRS-speak?
<http://www.irs.gov/newsroom/article/0,,id=179211,00.html>
The top-level entry for the IRS explanation is at
<http://www.irs.gov/irs/article/0,,id=177937,00.html>
* But bureaucrats often miss this target, at least when writing...
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Mark Bole on March 4, 2008, 10:15 pm
Please log in for more thread options Ed wrote:
> I presented an unlikely scenario
[...]
> It is obvious that there is disagreement even within this august
> group.
Perhaps, given an "unlikely scenario". Thank goodness there's that
Circular 230 disclaimer at the bottom of every message... ;-)
> What I'm looking for is an explanation of the program that is free of
> IRS-speak and CPA-talk (sorry) and is written in plain simple English
> that the ordinary Joe and Jane Taxpayer can understand.
I haven't read all the replies, but is it possible that such an
explanation does not exist? After all, we're talking about a tax
rebate, not a phenomenon of nature.
Ask yourself, is there a tax consequence to Joe and Jane *not*
understanding? Whatever they miss in 2008, they can claim in 2009.
Please do not start three or more threads on the same topic, it is
contrary to the aims of a moderated newsgroup, IMHO.
-Mark Bole
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Alan on March 5, 2008, 9:44 pm
Please log in for more thread options Ed wrote:
> I presented an unlikely scenario where a single person has AGI of
> $8749 and a tax liability of $1 and asked what the rebate would be. I
> got four different answers:
>
> The answer depends on the amount of earned income, i.e., wages,
> salaries, or net self-employment income.
> $1
> $300
> $301
>
> It is obvious that there is disagreement even within this august
> group.
>
> What I'm looking for is an explanation of the program that is free of
> IRS-speak and CPA-talk (sorry) and is written in plain simple English
> that the ordinary Joe and Jane Taxpayer can understand.
>
> If I could find that, (or be able to understand the program so I could
> write it myself) I would go away and not bother you anymore. I'm not
> trying to publish a paper, I just want to be able to clearly and
> accurately explain the program to clients.
>
> Thanks for your patience,
> Ed
>
A Reasonable Explanation:
The payment is not a rebate. It is an advance payment of a
refundable tax credit for tax year 2008. Anyone who files a 2008
tax return and computes a credit that is less than the advance
payment does not have to pay any part of the advance payment
back. Anyone who files a 2008 tax return and computes a credit in
excess of the advance payment will get the excess.
The General Rule to obtain an advance payment in 2007:
Every taxpayer who files a tax return will receive the lesser of
$600 or their tax liability (regular plus AMT) measured without
including the child tax credit. $1200 on a joint return.
The Special Rules:
Certain taxpayers will receive a minimum of $300 ($600 joint
return) if they meet either of the following two rules.
Rule 1. They have qualifying income (any combination of social
security benefits, VA benefits and earned income) of at least $3000.
Rule 2. They have gross income greater than the sum of the basic
standard deduction plus the personal exemption (2X the personal
exemption on a joint return) and they have a tax liability of at
least $1.
Any taxpayer who meets the Special Rule will receive an
additional $300 for each qualifying child eligible for the Child
Tax Credit.
The amount of the advance payment will be reduced by 5% of the
AGI in excess of $75000 ($150,000 joint return).
Nonresident aliens, dependents, estates and trusts are not
eligible. Each taxpayer must have a social security number to
qualify, If one spouse does not have a SSN on a joint return,
both spouses are ineligible. A qualifying child must also have a
social security number.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Mark Bole on March 5, 2008, 11:05 pm
Please log in for more thread options Alan wrote:
> Ed wrote:
>> I presented an unlikely scenario
[...]
>> What I'm looking for is an explanation of the program that is free of
>> IRS-speak and CPA-talk (sorry) and is written in plain simple English
>> that the ordinary Joe and Jane Taxpayer can understand.
[...]
>
> The payment is not a rebate. It is an advance payment of a refundable
> tax credit for tax year 2008.
So much for avoiding IRS-speak and CPA-talk! ;-)
According to Merriam-Webster, a "rebate" is "a return of a part of a
payment". The fact that part of my tax payment might be returned to
someone else who didn't owe any tax in the first place does not make the
definition inapplicable.
Really, whatever term you use, it is a mid-year tax cut for most people,
and a government welfare payment for others (those for whom the
"refundable" part is significant).
Now if the marketing types had been on the ball, instead of calling it a
"stimulus payment", maybe they should have taken a cue from the Alaska
folks and called it a "freedom dividend" or something like that...
-Mark Bole
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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