In Feburary 2008, President Bush signed the Economic Stimulus Act of 2008. Initially designed to give low and middle class taxpayers a little relief in light of real estate downturns, rising inflation and high gas and food prices, the act has been further expanded since that time and offers a variety of incentives for both businesses and individuals. The overall goal of the Act is to "jumpstart the economy." .
Individuals and couples filing Federal Income Tax Returns for 2007, even up until the late filing deadline of Oct. 15, 2008, may qualify for up to $2400 in rebates (for a family with four children and $70,000 in adjusted gross income). Other rebate amounts are $300 for qualifying individuals with at least $3000 in income, $600 for a head of household with $50,000 in income, $900 for a single parent with one child and $50,000 in income, $1200 for joint filers with two children and $60,000 in income, or the $2400 rebate amount mentioned above.
In addition, after lobbying by groups supporting senior citizens, social security payments were added to the "eligible" income, so most seniors on fixed incomes who filed a tax return and did not owe tax over the amount of the rebate have or will receive a check from the federal government.
The rebate checks are distributed to citizens in hopes that they will spend them on goods and services and keep the economy moving. With millions of the checks already distributed, no one is quite sure if this theory has worked, as many people were forced to use their checks to catch up on credit or mortgage payments, interest, and penalties.
However, additional credits were added to assist in trying to give the housing market a boost. First time home buyers, who have the ability this year to choose from more houses on the market at lower prices, can receive up to $7500 as a tax credit if they buy their first house this year. .
Incentives for businesses were also a part of the Economic Stimulus package, giving businesses the ability to deduct expenses at much higher levels than in previous years.
