Question: Should I wait to file my tax return to see whether Congress passes the Bush tax rebates? Is that part of my tax return or something completely separate? Avery
Answer: You should go ahead and file your return. You don't want to get into trouble with Uncle Sam and the Internal Revenue Service. Even if the rebate is eventually attached to your tax filing, all of us will be in the same boat if Washington asks for revisions. But I doubt that will be the case.
To be sure, the centerpiece of the Washington's current economic stimulus package is tax credits. But the details are still being negotiated, especially now that the Senate has weighed in with its own ideas. Despite strong signs of bi-partisan accord, the bill could change in coming weeks. It could also fail to pass. I'd hold off counting on the rebate money until President Bush signs the final economic stimulus bill.
More importantly, I'd like to make a suggestion on what to do with the rebate assuming the check comes in the mail in late spring or early summer. Washington wants to get money into your hands on the theory that you'll go out and buy an I-phone, a flat panel TV, pay for a delayed car repair, and the like. The rebate is designed to fight the gathering forces of recession by boosting consumer spending. Yet I'd rather people use the money---if it comes--to shore up finances. If there is a rebate, put the money toward paying down debt or adding it to emergency savings.