If people plan for a yearly tax rebate check won't this years advance be a bad thing for most people?
Answers: No.
One thing taxpayers won't have to worry about is giving back any excess if their 2008 taxes show that the advance this year was actually more than they should have received.
"If it turns out that credit on your 2008 return is greater, you get to take that additional amount," says Luscombe. "If it's lesser than what you got in 2007, you don't have to refund that back to government." The law says the IRS can't recover the extra payment by reducing your 2008 refund or adding to your 2008 tax bill.
Mitchell is right--if you normally get a refund every year, not much will change next year. The government has issued a tax credit for 2008 and are issuing checks in advance for that credit to stimulate consumer spending. If they decided not to issue checks, your refund would increase by that amount next year. Basically they are giving you the tax credit early--next year's taxes won't change much.
And the check you receive this year will not need to be reported as taxable income since it is a tax credit.
2008 Tax Rebate?
Here is the situation. In 2007 my wife and I made approx 60k combined and have 2 kids. However, I be an independent contractor and will owe probably owe around 2-3k taxes, even filing as one. My question is will we still carry a rebate check and if so how much? I may have to do a pay plan to pay the taxes I owe. Please any info would be greatly appreciated. By the instrument, I became employed by a company within Jan 08 and am no longer an independant contractor.Answers: Assuming you pay your 2007 taxes prompt, then you will receive a rebate. (Your current status surrounded by 2008 doesn't matter.)
Since you are file jointly and have a 2007 tax liability of over $1200, you will receive a $1200 rebate. You will also receive $300 for respectively dependent child born in 1992 or after that.
While the rebate depends on your 2007 income, it is actually a rebate toward your 2008 taxes. According to the bill, surrounded by 2008, taxes would be cut from 10 percent to zero percent on the first $6,000 dollars of taxable income for individual taxpayers.
It's similar to a one time tax cut for 2008, but you attain the rebate now instead of waiting to report your 2008 taxes.
This article will provide answers to all of your question about the rebate: http://finance.yahoo.com/taxes/article/1...
What is net income tax liability?
Answers: I was about to answer, but the guy above gave the same answer I would have. I will say that if, in your mind, this doesn't answer the question, give us the context within which the term is used and maybe we could clarify this better for you.
This figure is the amount of tax you owe, both regular and alternative minimum tax entered on line 46 on the 2007 Form 1040, before you continue working down your tax return and subtract certain credits to arrive at your actual, final tax bill.