So, so far
Jul. 21st, 2001 01:47 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
tiamatladyI havehis letter, since I won't be getting one of mine own until after I finally file.
Plus I had a long talk with Bret about this last night.
Your refund will NOT be taxable. It is pretty much yours to do with.
BUT
That's not what I'm afraid of.
Here's what the IRS site says:
"The Economic Growth and Tax Relief Reconciliation Act of 2001 approved by Congress and signed by President Bush directs the Treasury to send checks to most income taxpayers this year, giving them an advance payment of a 2001 tax credit. This is a reduction of tax and is not taxable income on the federal tax return"
Note the words "advance payment".
Translation - at the bottom of your return, you will be asked how much you received. It will then be SUBTRACTED from the amount of tax you paid (Withholdings, etc.)
This means, for example, that you are expecting a $500 refund. You are single. You got $300 this July. Your refund NEXT April will be $500-300 = $200.
Try THIS one - You are single, you are expecting a $100 refund. You got $300 this July. That means NEXT April you will owe $200.
Not to say that will happen. See, they are lowering the tax rates. So if you make the same amount this year (2001) that you did last year (2000), you will pay less in taxes. This amount you are receiving is the Feds giving you an advance on that tax rate reduction, which is retroactive through the beginning of the year. Rather than getting your refund next year, Dubya has decreed that you, the hard working American people, should have YOUR money to do what YOU want with it. Isn't that nice of him?
And, contrary to what Bret said, this letter is not written to be a "gift" and theFAQ on the website proves that.
Now I need to say this - I AM an accountant but by no means am I perfect, I am low man on the totem pole in my office. This is MY opinion, having read the FAQ, which you may also do, and applying my experience with the IRS language to interpret the decision. I expect that my bosses (two of them with more than 50 years of experience and two Master's degrees) will agree with me, in fact it is from them that I get the basis of my opinion. If you have any questions/doubt/concerns, please, contact your tax advisor. (For those people whose tax advisor is ME, this is what I think. *hugs*)
So there it is. Honestly, I won't know any more until I see the new schedules, and, more importantly, what the tax forms look like for next year, They are usually released preliminarily in August, so I'll check.
This is really gonna suck for me, next year. Lots of pissy clients saying "_I_ got a letter and _I_ don't owe any money." *Sigh*
Plus I had a long talk with Bret about this last night.
Your refund will NOT be taxable. It is pretty much yours to do with.
BUT
That's not what I'm afraid of.
Here's what the IRS site says:
"The Economic Growth and Tax Relief Reconciliation Act of 2001 approved by Congress and signed by President Bush directs the Treasury to send checks to most income taxpayers this year, giving them an advance payment of a 2001 tax credit. This is a reduction of tax and is not taxable income on the federal tax return"
Note the words "advance payment".
Translation - at the bottom of your return, you will be asked how much you received. It will then be SUBTRACTED from the amount of tax you paid (Withholdings, etc.)
This means, for example, that you are expecting a $500 refund. You are single. You got $300 this July. Your refund NEXT April will be $500-300 = $200.
Try THIS one - You are single, you are expecting a $100 refund. You got $300 this July. That means NEXT April you will owe $200.
Not to say that will happen. See, they are lowering the tax rates. So if you make the same amount this year (2001) that you did last year (2000), you will pay less in taxes. This amount you are receiving is the Feds giving you an advance on that tax rate reduction, which is retroactive through the beginning of the year. Rather than getting your refund next year, Dubya has decreed that you, the hard working American people, should have YOUR money to do what YOU want with it. Isn't that nice of him?
And, contrary to what Bret said, this letter is not written to be a "gift" and theFAQ on the website proves that.
Now I need to say this - I AM an accountant but by no means am I perfect, I am low man on the totem pole in my office. This is MY opinion, having read the FAQ, which you may also do, and applying my experience with the IRS language to interpret the decision. I expect that my bosses (two of them with more than 50 years of experience and two Master's degrees) will agree with me, in fact it is from them that I get the basis of my opinion. If you have any questions/doubt/concerns, please, contact your tax advisor. (For those people whose tax advisor is ME, this is what I think. *hugs*)
So there it is. Honestly, I won't know any more until I see the new schedules, and, more importantly, what the tax forms look like for next year, They are usually released preliminarily in August, so I'll check.
This is really gonna suck for me, next year. Lots of pissy clients saying "_I_ got a letter and _I_ don't owe any money." *Sigh*
