Wait a second. This is not an advance. When you get a tax refund, is
the government "giving you money"? No, it is giving you BACK the money
you OVERPAID on your taxes, through withholding over the course of the
year. That's why it's called a refund.
The amount of the checks that are being cut varies according to some
broad rules. The broad rules basically follow the decreases in the tax
rates applicable to those broad categories of people.
Now, did you adjust your withholding to correct for the reduced tax
rates? I didn't bother, and neither did most people. So more is being
withheld than is needed to pay your taxes, so that means a bigger refund
after you file your tax return. All that is happening here is that the
money that is being needlessly withheld and WOULD BE IN YOUR REFUND is
being sent back to you this year instead of next year.
There may be some folks for whom the broad rules miscalculate the exact
amount of the difference, but for MOST people, assuming that their
financial circumstances haven't changed appreciably, the check won't
significantly change their refund from what they got last year, because
it parallels the reduction in tax rates.
Even assuming that the check is greater than the actual reduction in
your taxes due to the changes in rates, you will end up paying the
government only because your withholding (check) UNDERPAID your taxes.
It's still not an advance. If anything, it is "undoing" some of the
excess withholding from your paycheck.
In short, it's not an advance when it's your money in the first place.
Chris K.
Bruce Lowry wrote:
>
> Sorry, I just restudied the facts. Previous law was that the first
> 6000.00 was taxable
> at 15%. new law for 2001 is that first 6000.00 is taxable at 10%. This
> check is for this particular area. Married and head of household rules
> vary, but this is and ADVANCE of this money.
> Bruce Lowry
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