Federal Economic Stimulus Plan
The Federal Economic Stimulus Plan (FESP) has been in the news for the last couple of weeks. Various news organizations reported the rebates that many of us can expect, $600 for individuals making upto $75,000 and $1200 for couples making upto $150,000. They also reported that the rebates phase out above those levels but fail to mention what the phase out plan looks like. I fail to understand why. Also, is the $75,000 based on your gross income or Adjusted Gross Income and for which tax year?
I truly feel that journalists are turning into story writers focusing less on the facts and concerned more about writing a good story.
Anyways, looking at the bill on http://thomas.loc.gov/cgi-bin/query/F?c110:5:./temp/~c110HfpSYR:e1754:
these seem to be the details:
(d) Limitation Based on Adjusted Gross Income- The amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (f)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer's adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return)
So for every $1000 you make above the limit that applies to your marital status, you will get $50 less in rebates.
For individuals who earned greater than $87,000 and couples who earned greater than $174,000 in 2007 (based on the returns you are supposed to file by April 15th this year) the rebate will be $0
Note that this is based on your AGI. AGI is calculated after certain allowable deductions:
http://en.wikipedia.org/wiki/Adjusted_Gross_Income
Of note is the fact that an IRA contribution can be deducted. So an individual making $79,000 can contribute $4000 to an IRA before April 15th for the year 2007, thereby reduce their AGI
to $75,000, and receive the full $600 rebate.
I truly feel that journalists are turning into story writers focusing less on the facts and concerned more about writing a good story.
Anyways, looking at the bill on http://thomas.loc.gov/cgi-bin/query/F?c110:5:./temp/~c110HfpSYR:e1754:
these seem to be the details:
(d) Limitation Based on Adjusted Gross Income- The amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (f)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer's adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return)
So for every $1000 you make above the limit that applies to your marital status, you will get $50 less in rebates.
For individuals who earned greater than $87,000 and couples who earned greater than $174,000 in 2007 (based on the returns you are supposed to file by April 15th this year) the rebate will be $0
Note that this is based on your AGI. AGI is calculated after certain allowable deductions:
http://en.wikipedia.org/wiki/Adjusted_Gross_Income
Of note is the fact that an IRA contribution can be deducted. So an individual making $79,000 can contribute $4000 to an IRA before April 15th for the year 2007, thereby reduce their AGI
to $75,000, and receive the full $600 rebate.
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