Get ready for tax rebate checks expected to begin arriving in May. The checks are the centerpiece of the Economic Stimulus Package Act of 2008, legislation passed in the hopes of increasing consumer and business spending and keeping the U.S. economy from sliding into recession.
Here's what the new law contains and what it could mean for you.
- Tax rebates.
Single taxpayers can receive a one-time rebate of up to $600; married couples who file a joint return may qualify for up to $1,200. If your 2007 adjusted gross income exceeds $75,000 (single) or $150,000 (married, joint), rebate amounts begin to phase out. - Rebates for those paying no tax. Individuals with no tax liability but at least $3,000 of earned income in 2007 may qualify for a flat $300 check. Social security income and federal payments to disabled veterans and their widows qualify as earned income for rebate purposes.
- Child rebates. Those who qualify for the basic rebates may also get an additional $300 for each dependent child under age 17.
- Business tax incentives. The Section 179 limit for expensing business equipment purchases is increased for 2008 from $128,000 to $250,000, and the phase-out threshold is increased from $510,000 to $800,000. First-year 50% bonus depreciation is available for qualifying 2008 equipment purchases.
- Homeowner help. The new law increases the mortgage limits on loans issued by Fannie Mae, Freddie Mac, and the Federal Housing Administration.
The stimulus package is supposed to pump $151.7 billion into the U.S. economy.
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