Think your income is too high to receive one of those federal rebate checks of up to $1,200 - or even more to some families with children - that most taxpayers will get later this year? Don't give up just yet.
The plan passed by Congress and ready to be signed by President Bush will rush full rebates to individuals with adjusted gross income of up to $75,000 in 2007 and couples with income up to $150,000, but quickly phase out the amount when income is higher. The one-time checks are scheduled to begin arriving in May.
Complex provisions, however, may give people whose rebate is curbed this year because their 2007 income exceeds those ceilings another one-time shot at it. That will happen next year when they file tax returns for 2008. If their 2008 income is below the ceilings, they may qualify to take this year's barred rebate as a credit against 2008 tax.
People whose 2007 income was above the limit can try to reduce their 2008 income to fully qualify next year, advises Bob Scharin, a senior tax analyst at Thomson Tax & Accounting. Adding money to a 401(k) or clearing out losing investments at a loss can do double duty by lowering regular tax and also making you eligible for the rebate, he says.
And even for this year's rebate, self-employed people and others who are still eligible to contribute for 2007 to a tax-deductible retirement plan such as an IRA, SEP, or Keogh, can lower 2007 income.
LEONARD WIENER
