I read the Tax rebate is deducted from 2009 tax return. Is this true?

As long as you are diligent about saving money, it should be no problem to get money now to pay it back next year. The problem is that most American's are poor at saving, and this begs the question, of whether or not this type of a plan is even good for America!

There are still a lot of details that need to be worked out with Treasury, but the basic answer to the question is "yes and no". :) Yes, technically it may be coming from next year's "refund", but actually it suppose to be coming from an additional bonus amount that is being planned for next year's taxes... based on new 2008 tax cuts. So "NO" it will not be eating away at what you would normally be planning on getting back in a refund for next year. Think of it this way... You normally receive $1000 back as a refund check each year. They are planning for tax adjustments next year (possibly eliminating the 10% tax bracket... applying to the first ~$6000-$16,000 made... don't have the exact numbers with me at this time). So the result is that you will actually be owing less in taxes for the 2008 year. In the case of our example, owing less $ in taxes would result in you getting back $1600 in 2009 for the 2008 tax year. But since the country needs the money right now, they will be giving you the $600 "bonus amount" today. So in 2009, you will still get your $1000 refund that you would have expected in the first place. Does that make sense? The only reason it is not happening for the 2007 tax year, is because it is too late in the tax season to make the cuts for this year. Like I said, there are still details that need to be worked out, but that is the overall plan that is being developed. Obviously we just have to wait and see how it is all played out, but this is actually "extra" money as it relates to the individual...

I have also read that this will be applied towards the 2009 tax refund. It sounds like they are giving us extra money now, only to make you worry about paying it back next year (when you have forgotten about it). I've been told that I pay my taxes properly. When it comes time to file, I am almost exactly at a break even point...either I owe a very small amount or the government owes me a very small amount. This means that I am paying just about the right amount of taxes throughout the year. Most people who look forward to getting their large tax refunds (I talked to two people yesterday who were getting between $5000 and $9000 back) don't realize that all they are doing is giving the government an interest free loan throughout the year. Why give them that? They certainly won't give you an interest free loan! Now, with this package, I am starting off the 2008 tax season $1200 in the hole (married couple). The only thing I can think of doing with the money is throwing it in a high yield savings account (ING, etc) and try to collect a little bit of interest on it before I have to pay it back by 15-Apr-2009. I don't understand our government sometimes...

NO, you DO NOT PAY IT BACK. Period. There are speculation about where this money is coming from... people saying we're "taking from out children", whatever. But no, its not a liability.

I read the same thing. It makes absolutely no sense for them to do this. The reason for the tax rebate is for people to spend it to stimulate the economy. Most people are going to have to hold onto this money to pay it back next year. What a great government we have!!!!!

This is from an article on cnn.com: The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time. The IRS website refers to the rebate as an "advance payment", confirming that it's intended to be an early refund of taxes. If you're really concerned about it, you can always turn around after you receive the rebate and make an estimated payment for 2008

When I got the rebates in 2001 and 2003 I had to deduct it from my refund amount.That will probably be the same for the 2008 taxes. Nothing is ever free especially money.