Will You Get Your Tax Relief Check?
Those of us who have already received our tax refund (those who got one) have probably already used it. Due to the increase in gas prices, every day bills, and unexpected bills it doesn’t leave much left over. The good thing is we all have something more to look forward to – the tax relief checks. President Bush is trying to keep us from going into a depression. To accomplish this he has passed a bill that will allow low-income and average-income citizens a check that will make things just a little bit easier.
The rebate amount starts to phase out for single filers whose 2007 adjusted gross income is more than $75,000 and for married couples filing jointly whose 2007 AGI is more than $150,000. The rebate is reduced by $50 for every $1,000 you earn above the income limit. For a single filer without children, that means the credit phases out entirely at $87,000; for joint filers without children, $174,000. The upper limits of the phaseout zones rise depending on the number of children you have. Children who are claimed as dependents on their parents’ returns won’t get a rebate, even if they work, file a return and pay taxes.
In general, the rebate amount can’t be more than your net tax liability, which is your tax liability before subtracting refundable credits and child credits. But even if you have no net tax liability, you can still qualify for a rebate of $300 as a single filer or $600 as a joint filer if you have at least $3,000 in income from a job or self-employment, or from Social Security or veterans’ benefits.
To get a rebate, most people need only to file their 2007 tax return. (If you request an extension, you won’t get your check until after you file.)
But about 20 million people will have to take an extra step to get their money. Low-income seniors and disabled veterans (and their widows) who have more than $3,000 in income and don’t generally file a tax return need to file to qualify for the partial rebate.
If you (or your elderly parents or relatives) are among those affected, filing the 1040 won’t affect your tax bill. It’s just the mechanism by which you prove that you qualify for the rebate (it doesn’t even matter if the April 15 filing deadline has passed). But note that you can’t use the simplest tax form — the 1040EZ — because you can’t report Social Security or veterans’ benefits on it.
To figure out which numbers to include on the tax return, you should have already received Form 1099-SSA reporting your Social Security benefits. If you receive Railroad Retirement benefits, consult Form 1099-RRB. And if you received disability compensation, a pension or survivors’ benefits from the Department of Veterans Affairs, you can estimate your 2007 benefits by adding up your monthly benefits for the year.
Enter your 2007 total on line 20a of Form 1040 or line 14a of Form 1040A. (It doesn’t matter that the line is designated for Social Security benefits.) If you have already filed a 1040 but did not report some of these qualifying benefits, you can file a Form 1040X to amend your return. Listing the additional benefits will not increase your tax liability but could help you qualify for a rebate.