Stimulus Package Caution!!

[GreatOwl]

I am finding it rather amusing that so many news articles are referring to the stimulus package payout as a "rebate."  This would imply that the government is giving us back some of the money they received in tax payments in the past.  I am afraid it is not that simple.  Money received from the stimulus package will impact the economy.  However, it would be wise for tax payers to set aside at least 20% to pay the government back.

The money received will indeed be counted as taxable income.  Some of the most needy people will escape an overly heavy burden of taxation on this money, but the average American will need to pay both State and Federal tax on monies received.  I am sure this is going to be a big surprise to some when the 1099's come trickling in at the end of January 2009.

I have checked with several accountants and they are cautioning not to spend the entire amount unless a person has some sort of a savings plan to pay their taxes come 2009

I am sure all of us welcome the chance to have some "extra" money coming in.  I just think it is not correct to call it a rebate.

[GreatOwl]

I will go so far as to contradict myself.  I really don't know a firm answer and I don't know if anyone does.  Under HR5140 the intent was not to have the money taxed.  It still says States may do so if they wish. 

I have no idea if the final version was changed.  I am now getting conflicting reports from accountants.

Do we have a tax authority on this board??????