M & N Tax Consultants

312 Colfax Ave.
Grass Valley, CA
95945

530.272.1881 phone

530.272.2805 fax

Your Tax Rebate

You probably already received a rebate check from IRS. The rebate is NOT taxable. Please remember, the rebate is a - - -

2008 Tax Return Item. Congress wanted this money to reach folks as soon as possible. They told IRS to issue rebates based on 2007 returns. We will need to “close the circle” on your ’08 return. We’ll report the rebate you received. If the ’08 return shows you qualify for more, you get it! If the return says you should get less, you may keep the money you already got.

Rebate Basics. Note the word itself – “rebate.” It’s a return of your income tax. Each filer is allowed up to $600 of reduction (or rebate) of tax. This is true as long as the filer is not claimed as the dependent of another. Add an extra $300 for each dependent child not yet age 17.

"Minimum" Rebate. If your tax bill is below $300, you get a $300 minimum rebate as long as you have the right kind of income -- $3,000 or more from work or job, and/or a government pension, including Social Security.

Non-Filer Opportunity. Many older folks do not need to file a tax return. But, rebates are based on ’07 tax returns. With $3,000 or more of the right income, they should file. IRS has a simplified filing method. If you know such a person, call me.

Little Loopholes. IRS won’t take back any of the rebate based on your ’07 return. But, if your ’08 return qualifies for more, you will get it. This opens a few opportunities:

Separated parents of a child under 17 win if one parent claims the child in ’08, but the other parent claims in ’09.
Folks with too much income in ’07 could perhaps defer income in ’08 and earn the rebate.
Couples with high income who lost the rebate in ’07 might win in ’08 by filing separate returns.

Dirty Dozen Tax Scams. Each year IRS lists its top 12 tax scams. Internet “phishing” has been near the top in recent years, but the new tax rebates have brought out the greedy. The only road to a rebate check is to file a 2007 tax return. Scam artists are bombarding folks with letters, emails and phone calls claiming to help them collect their rebates. All you need to do is give them your checking account number. Right! IRS will NOT contact you by phone or email about your rebate. IRS urges you to report these attempts. The IRS website has a method to forward emails. You can use Form 3949-A (or a detailed letter) to report these efforts. Your report can be anonymous. Send it to: Internal Revenue Service, Fresno, CA 93888.