2008 Tax rebate in more details
Posted by Frugal on January 25th, 2008
Look for your tax rebate in the mail soon, if you didn’t earn too much last year.
The details of the tax rebate are not all out yet, but here is what I can collect:
1. The minimum earned wage needs to be $3000 for you to qualify for at least the $300 per person rebate, or $600 per couple, plus $300 per dependent child.
2. The maximum before phasing out is $75000 for individual, and $150K for couple. As far as I can tell, those numbers are AGI or adjusted gross income. Therefore, all itemized or standard deductions don’t help you in this case. The phase-out goes pretty quickly. Once you reach $187K for couple, you get zilch or nada. But if you have children, the phase-out limits are higher. But I can’t find that number from all the press releases.
3. There seems to be an exception to #1. If you’re a retiree, and only have investment income, it appears that if you have paid some taxes, you can still get the $300 to $600 tax rebate. There was one example from marketwatch.com, and that’s about all that I can find.
Obviously, not all tax rebates will be spent. But this is probably a more fair way of dropping helicopter money. And I must applaud the quick actions by President and the Congress. Anything that is too late will not be useful at all.
A more important thing for the financial markets is that the loan limit on Fanni Mae and Freddie Mac will be raised to $729,750 or 125% of the median house price in the area. That is a huge increase. So it will help the jumbo loan interest rates, if you qualify for the payment. I tried a loan amount of $600K, with $150K or 20% down. Using 30 years fixed at 5.5%, $15K property tax, $1000 home insurance, and $200 monthly HOA fee (about the ballpark for the single family prices in 2006), one must fork out $5000 per month for housing. Since one needs to pay some payroll tax, if not income tax, plus one needs to eat and drive, I assumed that the monthly pre-tax income probably needs to be $12K per month, or $144K annual salary.
Again, I truly wonder how people can afford those homes a few years back (if it wasn’t negative ARM).
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January 25th, 2008 at 7:30 pm
I too applaud the Prez and Congress in working together in an attempt to help the nations economy and in particular the middle class. I will not complain about getting money from the govt. Lord knows I give them enough. The money for me will essentially be fun money. I already anticipate getting a couple thousand back from my tax return which will be used to pay off short term debt. So the approximate 1200 dollars for my wife and I is completely discretionary income, I plan on parking it into short term savings for the time being, most likely a CD or money market.
January 26th, 2008 at 3:09 pm
I have been on Soc. Disability for 14 years. When I turned 65 last August, Disability automatically becomes regular Soc. Sec. That is my only source of income. I beliee that eliminates me from any rebate. Am I right? If I am, this makes no sense — people who need that $300 the most aren’t eligible. That’s Bush for you.
January 26th, 2008 at 3:10 pm
I have been on Soc. Disability for 14 years. When I turned 65 last August, Disability automatically becomes regular Soc. Sec. That is my only source of income. I beliee that eliminates me from any rebate. Am I right? If I am, this makes no sense — people who need that $300 the most aren’t eligible. That’s Bush for you.
January 27th, 2008 at 12:48 pm
So, is this rebate defintely going to happen?
January 30th, 2008 at 6:29 pm
I found a couple pdf files with details about the legislation of the 2008 Tax Rebate. Your readers may have already seen this, but for those who have not:
http://finance.senate.gov/press/Bpress/2008press/prb012808a.pdf
http://finance.senate.gov/sitepages/leg/LEG%202008/013008%20FINAL%20%20SFC%20Markup%20Doc%20%201-28%20(2).pdf
You must have adobe acrabat on your computer to read this file.
January 31st, 2008 at 10:13 am
Okay, my son grossed $3,135 in 2007. He turned 17 two weeks ago (January, 2008). We will definitely qualify for the rebate. Said son is qualifying dependent.
- Will he get $600 for himself while we get $300 extra for the dependent??????
February 3rd, 2008 at 4:11 am
Why are they calling it the “$600 Tax rebate” when most everyone I know along with myself will only get back $300 or nothing at all? We are too poor to get the rebate.