Tax Refunds & Advice

This year, millions of people will be receiving a tax rebate from the IRS. To go along with this, just as many will receive an economic stimulus rebate as well. As you can imagine, there are many ways that you can spend this money. The question is: how are you going to proceed? When it comes down to it, you want to be smart when it comes to using your tax rebate.

Here are three common ways to use your tax rebate(s) when it arrives in your mailbox in a few months:

1. Save, save, save. If you do not know what to spend your rebate on, why not put it in the bank? Although this is not the fun thing to do, it is always nice to have some extra cash in the bank.

2. Pay down debt. This is just as boring as putting the money in the bank, but it can be a great way to spend your tax rebate. When you pay down debt you will be able to relieve some of the pressure on your finances, while also avoiding costly interest charges.

3. Buy something that you have had your eye on. Do you want a flat screen television for your game room? How about a new outfit? There is nothing wrong with spending your tax rebate on something frivolous. After all, it is your money to do with what you please.

You can use your tax rebate and/or economic stimulus check in a number of different ways. Just remember to be smart with this money. It is not often that you get a check from the IRS!

Most Americans who qualify for an economic stimulus rebate will not have to do anything other than file their 2007 individual income tax return to receive their payment this year.

Most people are well aware that the Treasury is planning to send economic stimulus tax rebates to more than 130 million Americans. Although there is no way of knowing when your rebate will arrive in the mail, plans are for the checks to be sent throughout the late spring and summer months.

Generally speaking, you do not need to do anything in order to receive your payment. As long as you file your 2007 tax return as usual, you will be in line to receive your check when the time comes. In other words, the entire process is automated, which saves individuals from completing lengthy applications or directly contacting the Internal Revenue Service. As with similar rebates in the past, not everybody will receive the same amount. There is a maximum payment of $600 for individuals or $1,200 for those who file a joint return; the minimum is $300 or $600 for joint returns. Even if you do not think that you earn enough money, you will still want to keep an eye out for a rebate. If your tax return shows income in excess of $3,000, it is safe to say that you will be receiving $300 at the very least.

Parents who are eligible for this payment will receive an additional $300 for each child, with no cap.

Of course, there are income limits that can change the amount you receive. For individuals earning more than $75,000, five percent of the amount exceeding this threshold will be deducted from the payment. For joint filing, the maximum income is $150,000. 

As you can see, there are a few stipulations that will determine how much of a payment you receive. With that being said, more than 130 million Americans will receive an additional rebate by the end of summer. 

For further information on the economic stimulus plan, visit: http://www.irs.com/news/stimulus-rebate-2008.htm

Preparing a tax return can be difficult. Luckily, there are tips that you can implement to make things as easy as possible on yourself. Even if you do not use all of the following tax tips, you should be able to make a couple of them work for you.

• Hire a Tax Professional - If you do not know what you are doing, hire a tax professional or accountant to help. Professional assistance can come from a CPA or a tax franchise that specializes in individual returns.

• Use Tax Software - Tax software can help if you plan on filing your own return. As long as your tax situation is not overly complex, tax software will work wonders for you.

• Schedule Some Time for Taxes - Give yourself plenty of time. If you start to file your tax return the day before it needs mailed, you will be up against a wall. Instead, leave several weeks or months so that you do not get stuck in a bind.

• Keep Good Records - Keep good records during the year. This will help to cut back on your stress level when filing your return.

• Organize Everything Organized - To go along with tip number four, keep your records organized. This includes everything from receipts to bills to paperwork from the IRS. Anything you think you may need to file your tax return should be kept in an organized fashion.

• Obvious Deductions - Do not overlook obvious deductions. This is a common mistake made by people who file their own return.

• Defer Income to Next Year - If possible, defer income to next year. Of course, this is not always as easy as it sounds, but if you ask your employer to pay a year end bonus in January instead of December, it could help your tax situation immensely.

• Mistake Free Tax Return - Double check your return before sealing and sending it off to the IRS. The only time that it is too late to fix a mistake is when your return is in the mail. You want to make sure that your tax return is mistake free.

• Report All of Your Income - Do not forget to report all of your income. Do you have a part-time job that you work from home? If so, you need to report this as additional income. It may not sound fair, but it is the law.

• More Tax Deductions for Business Owner or Self-Employed - If you run your own business, or are self-employed, there will be many more deductions available to you. They include everything from office expenses to health insurance premiums and more. Ask your tax advisor which expenses you can deduct.