Three Tax Rebate Tips

The United States government has applied the jumper cables to our sagging economy, and it's hoping that the economic stimulus package will give America the spark it needs to start running again. Here are some details about you and the rebate.

Whether or not you agree with the government's economic stimulus package, it's become the law of the land. There's some validation behind the theory that the government can help boost a stumbling economy (see the New Deal), but there are also naysayers who wonder how we can continue to spend while our national debt continues to skyrocket.

Regardless of your economic views, the tax rebate has become reality. To understand how the program will affect you, consider these tax rebate tips.

1. File a return

Most people file a return, but it's not required of many lower-income taxpayers and people who receive veterans' benefits and Social Security. To qualify for the rebate checks, however, you'll need to send in a tax return. The IRS has pledged that it will work with various institutions to ensure that individuals are notified, but count on plenty of lower income folks falling through the cracks and missing out on the cash.

2. Determining your eligibility

The stimulus package stipulates that individuals with adjusted gross income (AGI) of up to $75,000 are eligible for a rebate of up to $600. Married couples filing jointly with an AGI up to $150,000 can receive up to $1,200. After those levels, the rebate will decrease by 5 percent for every dollar above the income level.

For individuals who have earned income of at least $3,000 but don't pay income taxes (such as Society Security recipients), rebates of $300 for an individual, or $600 for a couple filing jointly, are available.

3. Receiving your check

The checks won't be in the mail until early May, and the IRS hasn't released any information regarding the order in which they'll distribute the money. Rebates won't be sent out with your regular refund. And you won't just receive a check, either. The IRS will send you a notice that specifies your rebate amount, and gives you a heads-up that Uncle Sam's gift is soon on the way. Approximately seven to 10 days later, your check should arrive. If you enrolled for the direct deposit option, you can expect your statement and an electronic credit to arrive at the same time.

With the U.S. economy reeling, the federal government is looking to apply this series of rebate checks as a band-aid mechanism. To ensure that the plan works, everyone must file a return (especially lower income individuals), and spend, spend, spend. Hopefully, the cumulative spark will get the American economy up and running again. Only time will tell if this quick fix will help us over the long haul.