What is a tax rebate?
A tax rebate
is money that is remitted by the government
to a tax
payer who has overpaid the Internal Revenue Service
. Tax rebates are calculated during the filing
of a tax return
and is common in the United States
. Below are some of the most commonly asked questions about tax rebates answered by the Experts.
If a person bought a house that qualified for the 2010 tax rebate for $51,000 (first time homebuyers tax credit) and borrowed another $11,800 for repairs and added$2,894 as closing costs, what is the amount that they could claim for the tax credit?
This may depend on a few factors. Typically, the homebuyer’s tax credit
is calculated depending on the purchase price of the property
. This, in other words, is called the “adjusted basis” on the date of purchase. The additional amount of $11,800 could be included in the adjusted basis if it appears in the Department of Housing and Urban Development (HUD-1) closing statement. Alternatively, if the repairs were completed before the closing date, they would be considered eligible for the credit. However, this may not be easy and the IRS may challenge this because the repairs would ideally not be shown in the HUD-1forms.
If a person made more than $3,000 with their retirement and more than $3,000 with their Social Security disability which they paid federal taxes on, what would their tax rebate be?
In most cases, if income
has been earned solely from retirement
and social security benefits
, a person may be eligible to receive $300 in tax rebates.
Would a person be eligible to get a first time homebuyer tax rebate check for a home that was purchased in April of 2004?
This may not be possible as first time homebuyer credit for a house bought in 2004 did not exist at that time.
If a person files an extension to file their returns, do they still qualify for the federal tax rebate?
In most cases, if an extension
is filed for a particular tax year the Stimulus payment will be received when the following year’s tax return is filed.
If a person bought a manufactured home that qualified for a tax rebate refund in 2009, when would they have needed to fill out the application for this rebate? And would this have been a finite fund?
Typically, the Internal Revenue Service does not have limited funds for tax rebates, although certain states offering first homebuyer credits may place a limit on the funds available. As long as the first time homebuyer qualified for and purchased a home prior to the 11/30/09 deadline
they should have received this credit. They wouldn’t have had to fill out an application and the credit would have been sent in the form
of a tax refund. This money could have been claimed in two ways. One way is when the 2009 tax return was filed and the credit was applied for. Alternatively, the individual
could have amended their 2008 return and then claimed the money.
The reasoning behind the tax rebate is that money given back to the taxpayer could fuel the economy. For instance the government authorizes a tax rebate that gives money to millions of Americans, who in turn spend the money at the store, which gives the store money to buy more goods and provide jobs and so on down the line. However it is debatable on whether the tax rebate really works, and who better to answer these questions, and many more like them than the Experts.