Like with many projects that Congress puts its hands to, the stimulus bill that President Obama signed in February has generated a lot of questions. One of the most common misconceptions is that stimulus payments will come by check, like the rebates that were enacted under the Bush administration.
Like with many projects that Congress puts its hands to, the stimulus bill that President Obama signed in February has generated a lot of questions. Who will get stimulus cash and how? Will the stimulus money have to be paid back? One of the most common misconceptions is that stimulus payments will come by check, like the rebates that were enacted under the Bush administration. Sifting through the bill’s provisions can yield more accurate answers, according to tax professionals.
Most taxpayers will get the stimulus money in the form of lower tax withholding, putting the extra cash in their paycheck. The amount should average about $45 a month for single taxpayers and $65 a month for those who are married and file jointly. When these taxpayers claim the stimulus tax credit (up to $400 for singles, $800 for couples) on their 2009 tax return, the lower withholding amounts will match up with their lower tax liability. If you’re self-employed, you have a choice. You can opt to lower your quarterly estimated tax payments by 25% of the anticipated tax credit. If you choose not to adjust your quarterly payments, the tax credit will show up on your 2009 tax return, resulting in a lower tax bill or a fatter refund check.
There’s another wrinkle to consider. Single taxpayers with an adjusted gross income of more than $75,000 ($150,000 for married couples filing jointly) are not eligible for the full amount of the stimulus money. The amount gradually gets lower for those with income above those levels and disappears completely for singles with an AGI over $95,000 or a couple with an AGI above $190,000.