Bravebeauty bravebeauty@cox.net

12 février, 2008 20:46

If you are a senior or a low to middle income tax payer - Call AARP www.aarp.org to find out where you can have your income taxes done for FREE. I called the local senior center and had my taxes done yesterday. On the stimulus tax rebate - YOU MUST FILE INCOME TAXES in order to receive the rebate. (See below - even if you are very low income).

"AARP Tax-Aide Provides Free Tax Preparation Assistance

By AARP Tax-Aide Volunteer Larry Maxcy

Tax season is upon us. Do you dread filling out those confusing forms? Are you afraid of making a mistake? Help is available.

AARP Tax-Aide provides free tax preparation assistance to taxpayers with low and middle incomes from February 1 through April 15. Special attention is given to people age 60 and older, but you do not need to be an AARP member or a retiree to use the service.

Tax law can be confusing. AARP Tax-Aide volunteers can make the process of filling out your return a whole lot easier. Tax-Aide volunteers complete a rigorous training program offered in conjunction with the Internal Revenue Service (IRS), and can assist taxpayers in claiming the Earned Income Tax Credit (EITC) as well as Child Tax Credits (CTC) and other eligible deductions."

"Action came as a new Associated Press poll showed both Congress and the president at their lowest approval ratings in years—22 percent for Congress and 30 percent for the president. Both marks dropped by 4 percentage points since January.

Faced with that perception and a faltering economy, Congress approved the whole package in about two weeks, showing it could move quickly if the stakes were high enough."

Senators also tightened the rules to prevent illegal immigrants from claiming payments.

Politically, both Sens. Hillary Clinton, D-N.Y., and Barack Obama, D-Ill., who are battling for the Democratic nomination for president, backed the plan and voted aye on Wednesday, but were not present for Thursday's final vote. Sen. John McCain, R-Ariz., the front-runner in the Republican presidential nominating contest, had skipped the earlier vote, but on Thursday went to the Senate and voted for the plan, siding with moderate Republicans and not the 16 members of the GOP who voted no.

In all, the payments would cost the Treasury $105.7 billion, all of which would be added to the budget deficit. That didn't appear to bother either Congress or the president.

Bush said the plan is "robust, broad-based, timely, and it will be effective. This bill will help to stimulate consumer spending and accelerate needed business investment."

Under one proposal, a worker earning at least $3,000 but not enough to pay income taxes would receive a $300 rebate. The maximum rebate would be $600 for single taxpayers with income of up to $75,000; $1,200 for couples with income up to $150,000. Those with children get an extra $300 per child. Rebates gradually phase out for higher earners.
David Wyss, chief economist for Standard & Poor's, favors rebates. But he acknowledges that if he were advising an individual, he would suggest using the money to pay off credit cards.

However, if Wyss were giving advice to the country, it would be, "You need some to go out and spend money and eat more meals our and stop cooking for yourself."

Wyss is not afraid that advice to save or invest the rebate will derail the economy. "I'm not concerned about people listening to rational advice and not spending," he said. "For most people, if a check shows up in their mailbox, it gets spent really quickly."

Not every economist is a fan of the rebate.

"It's a bad idea," said David Resler, chief economist with Nomura Securities. He said the impact of the 2001 rebates on the economy was exaggerated. The new stimulus package, which includes the rebates, will add about $150 billion to the country's debt. "Which means, now or later, interest rates will be higher than they would have otherwise been," Resler said.

Economists, of course, are looking at the big picture. But for financial advisers dealing with financially struggling clients, it's hard to support a spending spree.

"What drives me most mad about this tax rebate is that it's all about more consumerism," said Joanna Smith-Ramani, director of the Baltimore CASH Campaign. "They are saying, 'Buy, buy, buy.'"

The CASH Campaign provides tax preparation and financial counseling for the type of workers the rebates are targeting. The group encourages clients to use tax refunds to catch up on bills and salt away what's left in a savings bond, savings account or certificate of deposit, just the opposite of what the government is encouraging.

Silver Spring, Md., financial planner Peg Downey said the call to spend infuriates her.

"It reinforces bad behavior," she said. "You're training people to overspend."

Downey recommends using the rebate to start an emergency fund that you can tap, instead of credit cards, for unexpected expenses.

"If I could wave a magic wand, people would spend it on job training," said Rockville, Md., financial planner Christopher Brown. That could lead to a higher-paying job, which ultimately is better for the worker and the economy, he said.

There is no shortage of ideas how you can use rebate money to improve your finances. You know best where a small windfall can do the most good. So when that check comes in, use it to put your finances in better shape.

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Eileen Ambrose is a columnist for The Baltimore Sun, a Tribune Co. newspaper.

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