questions regarding the stimulus rebate?

We decided to send it back since it will likely bump us up into a higher income bracket. Guess we'll see what happens......

Hillside

Hillside, you may want to go check the IRS website. If you don't want to accept the check, that's fine...but if you are only avoiding it because of rumors you have heard, you may want to investigate further. rkintn posted part of the FAQ page, you can see the rest for yourself.

Kayleigh

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We will be using ours for a pond and root cellar to be dug, and maybe a cheap toy or two (been wanting a metal detector).

the stimulus payment will not be included in your income on next year's return. this payment is an advance on a credit that they have yet to create. the only reason you need to keep track of it for next year, is to find out whether they advanced you more than you were eligible for, or less than you were eligible for. if they advanced you too much, it's yours to keep. if they advanced you too little, they'll give you more.

as far as the logic behind income "bumping" you into a higher tax bracket, there's a lot of misinformation and misunderstanding about that. only the income that crosses into the new tax bracket is taxed at the new, higher rate. it doesn't mean that suddenly all of your income is subject to the higher rate. you should never use that as a reason to avoid income.

I'm going to quit working so I don't have to pay taxes, they'll still give me a rebate and probably a lot more. I think I'm starting to see clearly now.

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"Education is the ability to listen to almost anything without losing your temper or your self confidence"
Robert Frost

I don't need to be stimulated, it might kill me.

I seriously doubt that a tax rebate will be counted as taxable income - but even if it were, your concerns about higher tax brackets aren't accurate.

Look at the tax bracket rules: http://www.irs.gov/formspubs/article...164272,00.html

If you are on the borderline between tax brackets, extra income only means that the part of that extra income that in the higher bracket gets socked with the higher tax.

It doesn't mean that all of your income get taxed more.

So if you are $1 below a tax bracket line, and you get another $600 in taxable income, $599 of that gets taxed at the higher level. The tax on all the rest of the money you earned doesn't change a bit.



Lynda

We are going to spend ours to increase our self reliance.
We will be "helping" by making these purchases now, but in the future, we
will need to buy less and less.

So in our case, even though we're spending it, in the long run it will damage their grand consumer machine.

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