A self employed person had a bad year in 2007 and had less then $3000 income for 2007. Therefore, the person won't be eligible for a stimulus rebate. They expect 2008 income to be substantially higher then $3000. Will they be eligible to get the rebate in 2008 because they weren't eligible in 2007? The IRS FAQ's have a vague reference to this as a possibility but I'm not clear on the details.
"njoracle" wrote
Yes. The bribe err......economic stimulus rebate check.......sent out in
2007 is an advance on a 2008 credit.When all of us file the 2008 return (early 2009), we'll compute the amount of the 2008 economic stimulus credit, and then subtract the amount received in advance (in 2008). For most people it'll be even, for some they'll get some extra amount however the math works out.
So if your friend has more income in 2008, and qualifies for $600, but received $0, he'll get that much more tacked on to his refund, or owe that much less.
Other examples would be a family that bore a child in 2008, would see the extra $300 in their 2008 return.
Yes.
The stimulus payment is actually an advance payment of the estimate, based on your 2007 return, of a 2008 tax credit. Any amount of the 2008 credit that you didn't receive as a stimulus payment will be credited on your 2008 return.
Q. I don?t qualify for a Stimulus Payment based on my 2007 return. But my tax situation will be different in 2008. Will I qualify for any special benefit?
A. Possibly. The 2008 tax instructions will include a worksheet to help those who did not qualify for a payment or those who received a reduced amount determine if they can obtain a benefit when they file their 2008 tax returns next year.
Milt Baker CPA Michigan
So an amorous first quarter may have had a financial motive? :-)
What do you mean by "substantially higher"? If the person is single and their 2008 income is over 87k, they won't get a stimulus check (in the form of a tax credit) on their 2008 return filed by April 2009. Between 75k and 87k they get less than $600. Below 75k they get the full amount.
PS: Someone correct me if I'm reading the rules wrong.
Sex for money? Who does that.
That would be a pretty volatile business, if he goes from making too LITTLE one year, to making too MUCH the following year.
It's certainly possible, but probably pretty rare.
I agree.
Although perhaps a real estate agent specializing in $10 million+ homes might be in that situation....
Easy enough in farming to go from one extreme to another (altho it's a whole lit easier to stay on the losing end (damhikt) ).
The other answers have already told you that to the extent that you don't qualify based on your 2007 return, you may qualify based on 2008 and receive it )or part of it) then.
However, it's NOT A CARRYOVER.
Which is one reason why farmers can income average.
Understood and thanks for your response and the responses from the OPs. For the record, 2008 income is estimated to be $10,000 to $15,000
As I recall this is self-employment income. At that income level the bulk of the tax liability, assuming no other income, will be self-employment tax. It's only income tax that is considered in calculating the credit.
Yes, it is all self-employment income for a single person using standard deduction. I plugged some numbers into TaxCut (2007) and came up with two scenarios:
Can I assume that under 1. there would be a credit but under 2. there would be no credit or will it some how graduated?
Self-employment income is qualifying income for the rebate. I see the IRS calculator taking this into account using self-employment tax with the link at
Could happen if his business takes off suddenly, or if he has huge capital gains for 2008.
Well, that will be my situation exactly; and I doubt that it is so unusually, at least in my profession.
As a retired person, I had very little taxable income in 2007. But this year, I took some contract work that will pay me a 6-digit taxable wage.
No. You left out the important number: Income tax after credits (line 57). If there is at least $3,000 of qualifying income (there is here) the credit is income tax after credits (no children here) with a minimum of $300 and a maximum of $600 (no joint return here). With this set of facts the credit will be line 57 in case 1 and $300 in case 2. In case 2 he'll get a little help paying the self-employment tax (line 58); in case 1 he'll owe the complete amount of SE tax.
If you had SS you would probably qulaify the rebate this year. But if not, then you could try to defer some income to 2009 if you think your income would be over 75k.
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