The IRS provided some much needed clarification on the impact of Tax Rebate Checks to Taxpayers upon the filing of their 2008 Individual Form 1040 Tax Returns. The IRS has issued a draft release of the 2008 1040 Form, and if taxpayers click on the link below, they can clearly see that on Line 70, there is item called "Recovery rebate credit". Per the IRS instructions, this should be a negative amount for those who received the Rebate checks.
http://www.irs.gov/pub/irs-dft/f1040--dft.pdf
The impact of this is that Taxpayers who received the Stimulus Tax Rebate can expect to have their refunds reduced to the extent of the Rebate Checks that they received in 2008.
There were many people who were claiming that "the 2008 rebate checks were free money and would not affect their 2008 Tax Refunds upon filing of their 2008 Individual Tax Form 1040s." Clearly this notion was a false "myth" and people who spent their Rebate Checks unwisely proved to be very foolish indeed!"
Tax experts and many money advisors of course cautioned taxpayers to exercise some prudence as to spending these so called Tax Rebate Checks. They advised taxpayers to use these Rebate Checks to pay down credit card debts.
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