The 2008 Economic Stimulus Act and Taxes Articles | Taxes

By: Guy Starbuck

There’s a rumor doing the rounds in America that in 2008 the government will be mailing checks to households countrywide. What does this mean and how is it possible to know whether you'll get any of this amount? Known as the 2008 Economic Stimulus Act, it was formally approved by the Senate and the House of Representatives on 7th February 2008 and later endorsed by President Bush.

Now how does this Act impact the country and you?

1. One modification that this Act brings is the raise in Section 179, which deals with the depreciation expensing restrictions of small firms. Beginning from the year 2008, this amount now will be $250,000.
2. The Act in addition raises the overall investment restriction of Section 179 qualification to $800,000.
3. This Act provides a $600 tax rebate to singles earning below $75,000 and it’s $1,200 for couples earning below $150,000. By May, the Treasury Department anticipates the rebate checks to start being sent out.
4. A $300 tax rebate to individuals who had no income tax to pay in 2007 but earn a minimum of $3,000.
5. A $300 tax rebate per qualified child
6. In the first year, gives a depreciation of fifty percent of the modified basis of eligible property obtained in the year 2008.
7. The pertinent luxury vehicle upper limit on the first year depreciation raised to $8,000 in respect of eligible vehicles. Bonus depreciation would be permitted for AMT as well as for standard tax purposes.

Well these are huge tax breaks for most Americans and it signifies also that a lot of people could be receiving from the IRS a tax rebate check in the amounts ranging between  $300-1200 at some point of time after the month of May this year.

Besides giving the people tax breaks, the Act contains provisions to provide assistance on the home loan front. It suggests raising the loan amounts qualified for the Federal Housing Authority Insurance in addition raising the upper limit on the loan amount that can be bought by the Fannie Mac and Fannie Mae establishments to $730,000. Such efforts try to stem a possible decline in our country's economy.

To qualify for the above given tax rebates, you should file your returns for 2007. Once you have carried this out, the IRS will mail you a letter notifying you of your qualification. (You may get this communiqué even if you’ve not filed the current year's taxes as yet). After filing your taxes, you’ll receive another letter informing you of the calculated figure of the tax rebate check and precisely when you can look forward to getting it. In case you file returns with a tax expert or electronically, at that time itself you may be informed of the calculated figure of the tax rebate check. Even so you should receive a letter later informing you when to anticipate your check.