5 Ways for Making Use of Your 2008 Stimulus Check
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The 2008 stimulus payment is intended to serve as a onetime tax rebate for tax-paying Americans. The idea of this rebate is to give Americans additional spending money to help boost a flagging economy, especially if the money is spent on discretionary goods like furniture and equipment. The rationale is also for taxpaying citizens to use their stimulus check to pay off mortgage payments which may also boost the flagging real estate market.
You are not required to pay tax on your stimulus check when you file your 2008 tax return, and it will not affect the amount that you owe or any refunds you may receive. The stimulus payment will be initially calculated based on your 2007 income. Higher incomes will be paid the difference, but people who earned less in 2008 than in 2007 will not be required to return the difference. This unexpected bonus if spent wisely can help save your dollars. Surveys indicate that most consumers will likely use their stimulus checks to buy groceries or pay gas bills. 5 ways to use your rebate stimulus checks to their best advantage are:
Invest it: Invest in discretionary or luxury items like jewelry, electronics, equipment or furniture. Essentially these are investments that will either appreciate, or that you can claim depreciation on thereby saving taxes.
Clear debt: Use the stimulus payment to cut down on your debt. Pay off mortgages. Reduce the capital on outstanding loans you may have. You’ll save additional money on the reduced interest you will have to pay on a reduced loan amount.
Scope out offers by retailers: Many retailers have launched offers to entice customers to spend their stimulus check with them. For example: The Kroger chain or supermarkets is offering gift cards worth 110% of the checks value in exchange for your stimulus check. Sears is offering a 10% bonus to anyone who converts their stimulus checks to gift cards redeemable at Sears, Land’s End and Kmart. Staples.com, Walmart, Sam’s club, Radio Shack, Shoprite, Safeway, etc all have deals available to encourage you to use your stimulus check. Don’t forget to read the fine print before you hand over your stimulus check against any of these deals.
Pay overdue bills or to take care of expenses you’ve been putting off: Clear that backlog of bills, so you can start with a clean slate. Complete those car repairs that you have been putting off indefinitely till the “next paycheck.” Pay off medical bills or invest in medical insurance.
Use it for Section 179 Tax deductions: Small business owners should take advantage of the stimulus check to buy qualifying equipment. Section 179 then allows you to deduct the full purchase price of equipment purchased or financed during the tax year from your gross income, instead of writing off a little each year through depreciation. Office equipment, machinery, computers and computer software, vehicles used for the business purposes, property purchased for business purposes and office furniture all qualify for these deductions. Section 179 is an incentive created to encourage businesses to buy equipment and invest in themselves.
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