More cash for tax refund at Kmart

[berkeley]

Was at my local Kmart and they had a program that gave you 5% more cash for your tax refund check. Not sure the exact details since I didn't sign up (need to confer with husband on this). But this was the example provided:

If you get $300 refund, you can get a $315 Kmart cashcard.

[SkyeJaz]

Check out this article...I've been looking for a long time to try to find out exactly what the deal was with this "rebate"...this explains it exactly....I can look forward to giving my entire "retroactive advance" right back to Uncle (Shameless) Sam next April.

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Although it's kinda long, it explains exactly what this money is in normal language that everyone should be able to figure out...

My "refund" is going right back into the bank....

[crazytimes]

Sounds interesting.

No refund check for us though.

-Matt

[millervt]

Granted, the communication was poor, but the net is that the government did cut taxes, which is what I thought everyone wanted.

Anyone who is unhappy that uncle sam is keeping less of their money is welcome to mail me their rebate/refund/advance (whatever you want to call it).

[crazytimes]

I am still a little confused about that article.

It sounds like the article is saying that this is like an advance on NEXT years tax relief.

So since they are reducing the % rates, shouldn't EVERYONE who pays taxes get a check?? Regardless of whether or not you got a rebate this year??

I know we got a large rebate this year, BUT the main reason is because we were able to claim close to $5000 in charitable giving (tithe $$ for church).

The thing that bothers me is they make it sound like EVERY married couple will recieve $600, etc.

So can someone explain this in regular terms??

-Matt

[millervt]

Basically, they are calculating your "refund" assuming you pay the same taxes on your 2001 income as you did in 2000.

So, as, say, a married couple filing jointly, you get a "refund" up to $600 based on your 2000 taxes paid - if you paid at least $600, you'll get $600; if you paid less, you'll get up to that amount. The assumption is that you will have roughly the same amount of income in 2001, so you will qualify for that amount of tax reduction.

If, say, you only paid $300 in taxes in 2000, you'll only get a $300 "refund", but if you, say, make a lot more money in 2001 and pay more taxes, you will get the second $300 in the form of paying less taxes on your 2001 income tax return. You'll just have to wait for it.

I think the interesting part of this is that, say you paid $600 in taxes in 2000, soyou get a $600 "rebate" this year. If you only have to pay $500 in taxes in 2001, I think you get to keep the "extra" $100 (not quite sure about that).

Does this help at all?

PS - just to add some more comments, low income people get no benefit from this at all, since they paid little/no taxes in 2000, and presumably will also pay little/no taxes in 2001, so reducing the tax rate doesn't help them much at all. So, many married couples will get litlte or no money this fall.

And yes, you are right, this is an advance of your 2001 tax rate reduction. And it has nothing to do with any refund you got this year.

[tukangtaip]

Thanks for the useful info on the 'refund check'. For once, I am able to understand what the $600 was for. So it's not 'shopping-spree money' after all. I got $1,700 in refunds last year. I'll expect it to be less this year now that the $600 has been advanced.

[crazytimes]

I am still a little confused.

A lot of taxes were taken out of my parents checks, so they DID pay taxes. But after they calculated all their deductions, they got $1000 back.

This still doesn't explain WHY they aren't getting a check??

They usually took out about $200 - $400 in taxes on each of my mothers bi-weekly paychecks and that adds up to a LOT of taxes.

I think there was a LOT of confusion about these!

What I need to know is what would DISQUALIFY you from recieving a check?? Not paying taxes?? Because I KNOW my parents payed their taxes.

-Matt

[millervt]

Be careful not to confuse how much money was withheld from paychecks with "paying taxes". The money withheld covers not only federal income taxes, but also state, local, social security, etc. Regardless, it sounds as if your parents did eventually pay some amount of taxes, and thus should qualify for a "prebate".


How do you know they aren't getting it? Of course, the IRS could have made a mistake, I know there were some people they goofed on.

In any case, it really isn't a big deal, in that all it means is that, come next april, they get a bigger refund. They won't lose money if they don't get a check now, they just have to wait.

Or they could reduce their withholding now and get the amount effectively over the next 6 months with lower withholding.

[Jaadin]

Okay after speaking to the IRS and doing some reading on this issue, here is my understanding of this. And by the way we aren't getting a rebate check either!

These #'s are all hypothetical..............

Let's say Bob made $30,000, he had $2000 taken out of his check for federal taxes throughout the year. In doing his taxes, he subtracts his exemption for married filing joint ($7500), and he also get to claim an exemption for his two kids ($2300 each). That brings his taxable income down to $17,900. His taxes (at 15%) would be $2685. THEN $500 per child tax credit is deducted, leaving $1685. Since he paid in $2000 through his payroll he will receive a refund of $315. All the rebate check is doing is assuming you make about the same in 2001 is changing the taxes from 15% to 10%.Bob will receive the $600 rebate check.


Here is the scenario that would deny you the rebate check......

Steve made $28,000, he had $1000 taken out of his check for federal taxes. Steve gets to itemize his deductions and gets an exemption of $11,500, gets to claim his three child exemptions ($2300 each). This brings his taxable income down to $9,600. His taxes would be $1440. After subtracting his $500 per child tax credit ($1500), and applying what he already paid in, Steve gets a refund of $1000 (the per child tax credit is a non-refundable credit). Since Steve has no tax liability he gets no rebate check!

I hope this helps some of you that are a little confused:-)

[millervt]

Theoretically, the "bottom line" is pretty simple - if you had to pay federal income taxes in 2000, you get a "prebate" of up to $300 (single)/$600 (married joint), based on your 2000 taxes. In other words, go to your federal income tax form, look at the bottom, and see how much taxes payable you calculated, after all the exemptions and credits (as referred to above). Forget how much was deducted from your paycheck, or how much (if any) refund you got from 2000. You can really achieve the same thing by just increasing your withholding, by the way, but the government is trying to stimulate the economy by flooding households with "bonus bucks" in one lump sum rather than increasing your takehome pay by a few bucks a week...

And then pray for me next year, as I try to figure out my taxes, as we have 8 kids, two adoptions this year, one kid off to college for the first time, two home-based businesses plus a regular job, and other "fun" stuff. I *think* they helped me out this year with the tax law changes, but until I figure it all out, I really have no clue as to how much I really should be paying...

[crazytimes]

Thanks that makes sense now.

Either way we always end up getting a refund.


millervt - you should know they are increasing the child deduction or whatever by $100 each year for 5 years. So next time we do taxes kids will be worth $600, then a year later $700, and so on.

Either way, I am happy that they are relieving some of the burden on families.

Oh and I read somewhere about some Marriage Penalty thingy...anyone know about this?? They never teach us the good stuff in school!!

-Matt

[CINAMIN27]

from IRS's website:

Tax Rebate Information:

How Much Money Will I Get?

IF your filing status on your 2000 return is… AND the taxable income on your 2000 return is*… THEN your advance refund will be as shown below, UNLESS the tax liability on your 2000 return is less than the amount on the table**…

Single or Married filing seperate 2000 annual taxable income of
$6,000 or more
______________
you get $ 300


Head of household 2000 annual taxable income of $10,000 or more
______________
you get $500


Married filing jointly or Qualifying widow(er) 2000 annual taxable income of $12,000 or more
______________
you get $600

* Taxable income is the amount shown on the 2000 Form 1040, line 39; Form 1040A, line 25; Form 1040EZ, line 6; or on the TeleFile Tax Record, line K.

** If you filed Form 1040 or Form 1040A, your advance credit payment is limited to your tax liability which is the amount shown on your 2000 Form 1040, line 51, or Form 1040A, line 33.

When Will I Get My Advance Payment?

If the last two digits of your Social Security number are:
_____________________ You should receive your refund the week of:
________________________
00 - 09 July 23
10 - 19 July 30
20 - 29 August 6
30 - 39 August 13
40 - 49 August 20
50 - 59 August 27
60 - 69 September 3
70 - 79 September 10
80 - 89 September 17
90 - 99 September 24

For married taxpayers who filed a joint return, the first Social Security number on the return will determine the mailing date for the advance payment check.

Taxpayers may check the IRS Web site for the general advance payment mailout schedule. By the end of June, the IRS TeleTax system - at 1-800-829-4477 - will have recorded information on the mailout schedule and the steps for figuring the advance payment amount.

Those who have not yet filed a tax return for 2000 will not get any 2001 advance payment check until the IRS processes the 2000 tax return. The sooner taxpayers file their returns, the sooner they will receive any advance payment to which they are entitled. These taxpayers should not make any changes or adjustments to the 2000 tax return because of an expected advance payment. If they fail to fully pay any balance due to reflect an expected payment, they will owe interest and a late payment penalty on that 2000 balance due.


use this link & scroll down to the table

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[Jaadin]

Here is the chart including the changes with the new tax law........

Scheduled Increases

Tax Years Credit per Child

through 2000 $500
2001-2004 $600
2005-2008 $700
2009 $800
2010 $1,000

We have to wait longer to see any changes in the marriage penatly, bummer!

Marriage Penalty Relief

The marriage penalty is being reduced in several different ways over the next decade. Beginning in 2005, the Married Joint standard deduction will gradually be raised until it equals two times the Single standard deduction in 2009. Similarly, the top end of the 15% bracket will begin increasing in 2005 until it reaches two times that of the single 15% bracket in 2008. In addition, the Married Joint income phase out limitations for the Student Loan Interest Deduction and for the Education IRA, will be raised to two times the Single amount effective in 2002.


This site has lots of useful information about taxes and tons of other stuff, go check it out!

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