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The Economic Stimulus Act of 2008, signed into law by President Bush on February 13, 2008, will generally provide rebate checks worth up to $600 to individuals and $1,200 for families, plus $300 per child. Small businesses also benefit, in the form of incentives that encourage them to buy more equipment, such as computers and tools.
The Act almost doubles the value of the Section 179 deduction, allowing businesses to deduct as much as $250,000 (up from $128,000) of qualified expenses in 2008, with the phase-out threshold increasing to $800,000 (up from $510,000). Further, the Act makes the business depreciation provision more valuable, allowing a company to depreciate an additional 50% of the cost of an asset bought in 2008.
Recovery rebates to individuals
The Act provides a tax rebate to lower- and middle-income working (earning
a paycheck in 2007) families as follows:
- Eligible individuals will receive an amount equal to the lesser of their
net income tax liability or $600 ($1,200 if married filing jointly).
- Additional rebates of $300 will be paid for each child of an eligible taxpayer.
- A minimum tax rebate of $300 ($600 for married taxpayers filing joint returns)
will be paid to taxpayers with earned income of at least $3,000. Social Security
retirement benefits, as well as compensation and pension benefits paid to
disabled veterans are included for the purposes of determining income eligibility
for rebates.
- Rebates are phased out for taxpayers with an adjusted gross income (AGI)
in 2007 of $75,000 ($150,000 for married taxpayers filing joint returns).
Payment schedules announced
The IRS has released a schedule for stimulus payments, with the first payments being issued on May 2. Direct deposit payments will be issued before paper checks (if an individual's 2007 federal income tax return indicates a direct deposit, the individual's rebate payment will be directly deposited). Timing of payments is based upon the last two digits of each individual's Social Security number (on a joint return, it's the Social Security number of the primary filer--the individual who is listed first--that counts). The schedules apply only to returns filed and processed by April 15.
| Direct Deposit |
|
Paper Check |
| Last two SSN digits |
Payment scheduled |
Last two SSN digits |
Payment scheduled |
| 00 - 20 |
May 2 |
00 - 09 |
May 16 |
| 21 - 75 |
May 9 |
10 - 18 |
May 23 |
| 76 - 99 |
May 16 |
19 - 25 |
May 30 |
|
26 - 38 |
June 6 |
| 39 - 51 |
June 13 |
| 52 - 63 |
June 20 |
| 64 - 75 |
June 27 |
| 76 - 87 |
July 4 |
| 88 - 99 |
July 11 |
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