Myth Blaster – The "Stimulus" Payment from Uncle Sam

There seems to be major confusion and “myths” circulating in regards to President Bush’s so-called “stimulus” check. So I have taken the time to get the details, which also functions as the status of my check.

So here is a special Myth Blaster entry for today, May 4, 2008.

The Internal Revenue Service (IRS) has put out a search tool that allows you to track your rebate. Remember, those that have direct deposit will receive theirs first, as well as those that filed earliest.

If you are or think you are overdue for payment, then the IRS has a tool for that as well. But first check the IRS payment schedule.

The IRS will ask for your Social Security number, the number of exemptions you claimed on your 2007 tax return and filing status. There is a page to help you answer questions on what information to enter. You can also receive help viewing the application with your browser.

According to Topix, dated April 28^th 2008 …

The exact date you receive a stimulus check will depend on when you filed your tax return and on the last two digits of your Social Security number, but some taxpayers will find the payment in their back account as early as May 1^st. … See related story on stimulus payment details.
Taxpayers who opted for direct deposit, filed their 2007 return in time for the IRS to process it by ^{April 15th} and have a Social Security number ending with 00 through 20 are likeliest to receive their payment the earliest. On jointly filed returns, the mailing schedule will be based on the first Social Security number listed.

The mailing schedule is as follows for direct deposit filers, based on last two digits of your Social Security number:

00-20 = May 2^nd
21-75 = May 9^th
76-99 = May 16^th

For paper checks, the starting date is ^{May 16th through July 11th}. According to the IRS –

Taxpayers who didn’t choose direct deposit, stimulus payment checks will be mailed, and those checks will start going out May 9.

However, the IRS also stated that there may be exceptions:

A small percentage of tax returns will require additional time to process and to compute a stimulus payment amount. For these returns, stimulus payments may not be issued in accordance with the schedule, even if the tax return was processed by April 15.

This would be rare, assures the IRS …

We have some returns that require a second look, that require us to pull them out of the processing for some reason or another. [Stated by Anthony Burke, IRS spokesman in a telephone interview on April 29^th. … Some taxpayers may get a smaller stimulus payment than they expect. If you have a past-due federal or state income tax bill or some other type of past-due federal debt such as student loans or child support, your stimulus payment likely will be reduced by what you owe.

You can calculate what your stimulus check will be by visiting the IRS Calculator website.

CNN-Money reports:

Tax rebate checks will be distributed to most tax-paying Americans. The rebates serve as a one-time tax cut initially based on their 2007 incomes. Overall, the Treasury will distribute more than $110 billion to 130 million taxpayers by July. The government hopes to stimulate the flagging economy by putting some extra cash in people’s pockets – cash they can spend, add to their savings account, and use to help pay next month’s mortgage. …

And one of the questions asked by fellow Americans – Will I have to pay it back? – a legitimate question when dealing with the government’s IRS office:

No. … Your stimulus payment is a one-time tax cut – an advance on a credit you’ll receive on your 2008 return. You will not owe tax on your payment when you file your 2008 tax return, and it will not increase the amount you owe or reduce your 2008 refund.
The stimulus payment is based on your 2007 income initially. If it turns out that your 2008 income and number of children would have qualified you for a larger rebate than the one you received, you’ll be sent the difference. If it turns out your 2008 income was lower than in 2007 and you should have gotten a lower rebate, you get to keep the difference.
“If you were supposed to receive a larger payment than you did, you will get the extra money,” said Treasury spokesman Andrew DeSouza. “If you received more than what you should have gotten, you will not be penalized.”

I checked the Stimulus Check tracking website, and if you are not due a check within one week – it will not show up and you will receive a message:

We’re sorry. Specific information about your Stimulus payment is not available.

With the added paragraph:

Possible reasons include:
* Your payment may still be coming, but has not yet been scheduled;
* You did not file a tax return for 2007 or your return is still being processed;
* The information entered did not match our records.

The last would only be applicable if you received such a message on your computer screen while accessing the tracking web page.

The IRS states:

Please allow 6 weeks after filing your tax return before checking on the status of your Stimulus Payment.

When you receive your check, keep in mind that inflation is presently occurring with a possible turn to a recession. Economists have predicted that 2008 will be a recession year that could easily fall into a Depression by 2009.[i]

With that personal note set aside – try to put as much as you can into some interest-bearing account. But as CNN-Money staff writer, David Goldman, states:

…cash they can spend, add to their savings account, and use to help pay next month’s mortgage. As long as they don’t put it under the mattress, President Bush and Congress – who came together earlier this year to pass a so-called economic stimulus package – will be satisfied. …the effects of the stimulus will begin to reach households,” President Bush said … “This money is going to help Americans offset the high prices we’re seeing at the gas pump and at the grocery store.”

Meanwhile, I am concerned about the national budget (as important as ours). Spending without putting a stricter budget limit in certain areas – just to make the American people happy is not the solution. Tax cuts are good when stimulating an economy – but it is only a short-term fix according to economists. This is also true concerning the “tax holiday” for two or three months concerning federal taxes on fuel. Read “Put The Brakes on US Gas Tax Holiday“.

President Bush has been dealing with short-term fixes for two administrations – despite the fight against it by the Democrats and certain “moderate” Republicans. What President Bush SHOULD has done was follow the tax cuts with a strong appeal to Congress to pass the Fair Tax Act. This legislation has been approved by major economists in our country and think tanks as well. Neal Boortz and Rep. John Linder co-authored a book about it and it explains in detail how it will work to benefit the American taxpayer and the government as well – and especially the economy.

And that concludes the special Myth Blaster report. Any further questions, for more recent information, please visit the website links provided in this article.

A final note of caution – with this amount of money floating around the nation – there will be scam artists wanting to relieve you of your stimulus money – beware. Never give out your social security number to inquiries, et cetera – and especially any email that your receive supposed to be official. Also there will be those who will provide “loans” against the money you think you are getting. Wait until you receive your check. Does the term “loan shark” mean anything to you?

The IRS would not do that and they have a secure site for such procedures. I have provided the links in this article to IRS, as well as listed below:

BIBLIOGRAPHY:

Where’s My Stimulus Payment? – IRS
Payment Schedule – IRS
IR-2008-66 – Economic Stimulus Report Document – IRS
Frequently Asked Questions – IRS
Basic Information About Stimulus Payments – IRS
IR-2008-21: More Information About Stimulus Payments – IRS
IR-2008-37: Stimulus Payments to Social Security recipients and Veterans – IRS [pamphlet]
Basic Information About Stimulus Payment – IRS
IRS Outlines Stimulus Schedule, May 17th – Topix
Luck of the Draw, Andrea Coombes – Market Watch
Here’s Stimulus: What You Need to Know – CNN-Money

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[i] No matter who is elected or whether or not you blame President GW Bush or not. Technically, this ball goes into the ball park of an entity called Congress. Therefore, keep in contact with your representatives and senators. Under Constitutional Law they are responsible for the budget, taxes and whether or not we have enough refineries to meet the demand (they are 30 years behind) or whether or not the government will allow drilling more American oil to reduce dealing with foreign oil purchases; keeping in mind that trading also goes on when it comes to American crude oil and that the government retains a specific amount of crude oil for emergency issues.