Friday, April 25, 2008

The Great 2008 IRS Rebate

Well, according to a story yesterday on ABC News online, those automatically deposited Economic Stimulus payments should start arriving in bank accounts sooner than anticipated. Checking around the internet it is apparent that several issues are at the front of the pack over these checks. If anyone still has questions about the Economic Stimulus Plan and the so-called “rebate” checks the best source of information is still the IRS website. It is amazingly clear and there are links to a calculator and a FAQ sheet. All in all though, despite the questions of whether these checks will stimulate the economy, it seems as though they have succeeded in stimulating the entertainment value of the evening news and talk radio.

First, it is unbelievable how confused the average person seems to be as to whether they qualify and for how much. There are a couple of population groups who have less than standard circumstances and rightfully are entitled to be confused. Most however seem to struggle with the straight-forward English in the instructions. But why were people spending so much time on figuring out whether they would get it and how much when they needed to have been filing their taxes that are the primary means for qualifying? It probably has something to do with our American mindset of crisis living but who can say for sure.

Second, it is quite entertaining as to how much energy this topic can bring up with very little effort. There are those who think the whole idea is flawed. There are those who think the idea is flawed but aren’t about to turn down the money. There are those who made so much money they don’t qualify and therefore have now decided it is a flawed idea (so did they think it was an okay idea when they thought they were getting a check?). And last but not at all least there are those whose “beef” is with the nice online people who created a private handy-dandy calculator to help the average person figure out their stimulus check (gosh that almost sounds risqué). [Update: they fixed the calculator but the comments thread is still a fascinating read.]

All of this goes to illustrate that no good deed will go unpunished for long in this country if people and money and the government are involved. That debate aside, how will individual Americans spend their checks? Personally, although hard numbers have not been set, I anticipate that a portion of ours will go to charity, some to our vacation and some to pay bills. It seems prudent to spread it around and not dump it all in one place.

So let’s open the floor for comments, and remember to play nice. The question of the day is actually a two-part question: Do you expect to receive a “rebate” check? And, how will you be using it in your personal economic stabilization plan? Please do not reveal the amount of your rebate in your comment.


Austin Chu said...

Great post, love the insight, and you're totally on point. I work for a company that manages and tracks gift cards and blogged on about this a few days ago. To answer your first question: Yes. To answer your second question: I will be putting half of it towards my ROTH IRA, and I'm blowing the other half on one heli-ski run -- down in Las Lenas, Argentina this summer. So I'm going to stabilize our economy by shredding some South American powder. At least I'll be helping the Argentinian government, which is in essence helping us. Another thing, for your readers. Don't buy into the retailers who are offering 10% bonuses in gift cards when you exchange your stimulus. Consider this: $100B was spent on gift cards and around $8B was lost/unredeemed. My advice? Save it, put it towards debt, get that HDTV you've always wanted. At least you can say that Uncle Sam helped you finance it.

Melissa Donovan said...

This year, because I am now self-employed, I hired a firm to do my taxes. Wow, that was easy. Unless I go back to the cubicle life (unlikely), I will never do my own taxes again! I figure if non-writers are smart enough to hire me to do their writing, then as a non-accountant, I should be smart enough to hire an expert to do my taxes.

As for my rebate, I am going to use it to pay my taxes and accountant, and cover the cost of my summer activities, most of which are birthday, graduation, and baby shower gifts for loved ones.

Melissa Donovan at Writing Forward
Writing Forward

G's Cottage said...

@Austin - I agree about the gift cards. I don't like to give them unless the were requested toward a specific purchase where sending a check would create a hassle for the recipient.

@Melissa - Amen to getting a tax accountant. We made the switch almost 20 years ago when in the process of leaving the military we had eleven sources of income in one year. We've been tempted to go back and do our own but a business makes that not realistic.