Is The IRS Sending You a Rebate Check Find Out If You Are Eligible

Congress recently passed the Economic Stimulus Act of 2008. It's designed to inject $152 billion into the U.S economy. What does this mean to you?

You could be one of the 130 million taxpayers who will receive a rebate check this year.

If you own a business, your business can take advantage of two tax breaks: Increased Section 179 Amounts and Bonus Depreciation. For more information relating this this topic, please see my recent article: "How the New Tax Law Can Help Your Business: Two Tax Breaks for Businesses.

If you own or invest in real estate, you may find some relief with your "jumbo" loans.

ARE YOU GETTING A REBATE CHECK?

There are two groups eligible to receive rebates. You can only be in one group so if you qualify for both, be sure to pick the group that results in the higher rebate amount.

Group 1: Those who paid taxes in 2007. Group 2: Seniors, disabled veterans and widows of veterans.

Those specifically excluded from the rebate pool include nonresident aliens, estates, trusts and dependents (dependents only have to qualify as a dependent and need not be claimed as a dependent in order to be ineligible).

WHAT IS THE MAXIMUM POSSIBLE AMOUNT OF YOUR REBATE IF YOU ARE IN GROUP 1?

Keep in mind that these are the maximum possible rebate amounts and may not necessary be the amount you ultimately receive due to limits and phase-outs.

If you paid taxes in 2007, the maximum amount of your rebate is:

$600 for individual filers $1,200 for joint filers

Plus, add an additional $300 per qualifying child to your maximum possible rebate amount. There is no limit on the number of qualifying children!

Example: If you are a joint filer with two qualifying children, your maximum rebate amount is $1,800 ($1,200 basic rebate + $600 for two qualifying children).

WHO IS A QUALIFYING CHILD?

If you're familiar with the child tax credit definition, that same definition applies here. There are several requirements:

- A qualifying child must not have attained the age of 17 as of the close of the calendar year. - The qualifying child must be the taxpayer's qualifying child for purposes of the dependency exemption. - The qualifying child must be a son, daughter, stepson, stepdaughter, or descendant of such child, or a brother, sister, stepbrother, stepsister or a descendant of such relative.

Don't forget, your maximum possible rebate amount may be reduced due to limits and phase-outs. Read on to find out if your rebate amount is impacted.

WILL YOUR REBATE BE LESS THAN THE MAXIMUM POSSIBLE AMOUNT?

If you're in Group 1, your rebate amount may be less than the maximum possible amount due to limits and phase-outs.

First, the amount of your rebate is limited to your 2007 tax liability. This means if your maximum possible amount is $600 and your 2007 tax liability is $575, then $575 is the maximum rebate your can receive.