Congress recently passed the Economic Stimulus Act of 2008. It's designed to inject $152 billion into the U.S economy. What does this mean to you?

You could be one of the 130 million taxpayers who will receive a rebate check this year.

If you own a business, your business can take advantage of two tax breaks: Increased Section 179 Amounts and Bonus Depreciation. For more information relating this this topic, please see my recent article: "How the New Tax Law Can Help Your Business: Two Tax Breaks for Businesses.

If you own or invest in real estate, you may find some relief with your "jumbo" loans.

ARE YOU GETTING A REBATE CHECK?

There are two groups eligible to receive rebates. You can only be in one group so if you qualify for both, be sure to pick the group that results in the higher rebate amount.

Group 1: Those who paid taxes in 2007.

Group 2: Seniors, disabled veterans and widows of veterans.

Those specifically excluded from the rebate pool include nonresident aliens, estates, trusts and dependents (dependents only have to qualify as a dependent and need not be claimed as a dependent in order to be ineligible).

WHAT IS THE MAXIMUM POSSIBLE AMOUNT OF YOUR REBATE IF YOU ARE IN GROUP 1?

Keep in mind that these are the maximum possible rebate amounts and may not necessary be the amount you ultimately receive due to limits and phase-outs.

If you paid taxes in 2007, the maximum amount of your rebate is:

$600 for individual filers

$1,200 for joint filers

Plus, add an additional $300 per qualifying child to your maximum possible rebate amount. There is no limit on the number of qualifying children!

Example: If you are a joint filer with two qualifying children, your maximum rebate amount is $1,800 ($1,200 basic rebate + $600 for two qualifying children).

WHO IS A QUALIFYING CHILD?

If you're familiar with the child tax credit definition, that same definition applies here. There are several requirements:

• A qualifying child must not have attained the age of 17 as of the close of the calendar year.

• The qualifying child must be the taxpayer's qualifying child for purposes of the dependency exemption.

• The qualifying child must be a son, daughter, stepson, stepdaughter, or descendant of such child, or a brother, sister, stepbrother, stepsister or a descendant of such relative.

Don't forget, your maximum possible rebate amount may be reduced due to limits and phase-outs. Read on to find out if your rebate amount is impacted.

WILL YOUR REBATE BE LESS THAN THE MAXIMUM POSSIBLE AMOUNT?

If you're in Group 1, your rebate amount may be less than the maximum possible amount due to limits and phase-outs.

First, the amount of your rebate is limited to your 2007 tax liability. This means if your maximum possible amount is $600 and your 2007 tax liability is $575, then $575 is the maximum rebate your can receive.

Second, the rebate amount phases-out based on income levels.

The rebates start to phase-out when:

• A single person's 2007 adjusted gross income is greater than $75,000

• A married filing joint couple's 2007 adjusted gross income is greater than $150,000

If you're over these limits, then your rebate amount is reduced by 5% of the amount exceeding the adjusted gross income threshold.

WHAT DOES THIS PHASE-OUT REALLY MEAN?

Here is a formula you can use to determine your rebate amount:

Step 1: Determine your Maximum Possible Rebate amount

Step 2: Determine your 2007 adjusted gross income (AGI) (You can find this on your 2007 tax return).

Step 3: Is your 2007 AGI greater than $75,000? ($150,000 if joint filer)

If you answered no, you're done! You'lll receive the maximum possible rebate amount. If you answered yes, continue to Step 4

Step 4: Calculate your "Excess AGI." Your 2007 AGI - $75,000 ($150,000 if joint filer) = Excess AGI

Step 5: Calculate your "Rebate Reduction." Excess AGI x 5% = Rebate Reduction

Step 6: Is your Rebate Reduction amount greater than your Maximum Possible Rebate amount (from Step 1)?

If you answered yes, then your rebate amount is $0. If you answered no, then your rebate amount is:

Maximum Possible Rebate - Rebate Reduction = Your Rebate Amount.

Here are a few examples.

Example 1:

A married couple with no qualifying children and 2007 AGI of $175,000:

Step 1: Maximum possible rebate amount is $1,200

Step 2: AGI is $175,000

Step 3: AGI is greater than $150,000 so continue to Step 4.

Step 4: Excess AGI is $25,000 ($175,000 - $150,000)

Step 5: Rebate Reduction is $1,250 ($25,000 Excess AGI x 5%)

Step 6: Rebate Reduction amount ($1,250 from Step 5) is greater than Maximum Possible Rebate amount ($1,200 from Step 1) so the rebate amount is $0.

Example 2:

A married couple with 1 qualifying child and 2007 AGI of $175,000:

Step 1: Maximum possible rebate amount is $1,500 ($1,200 basic rebate amount + $300 for 1 child)

Step 2: AGI is $175,000

Step 3: AGI is greater than $150,000 so continue to Step 4.

Step 4: Excess AGI is $25,000 ($175,000 - $150,000)

Step 5: Rebate Reduction is $1,250 ($25,000 Excess AGI x 5%)

Step 6: Rebate Reduction amount ($1,250 from Step 5) is NOT greater than Maximum Possible Rebate amount ($1,500 from Step 1) so the rebate amount is $250. ($1,500 - $1,250).

WHAT'S THE MAXIMUM AMOUNT OF YOUR REBATE IF YOU ARE IN GROUP 2?

For seniors, disabled veterans and widows of veterans, the maximum amount of the rebate is $300 for individual filers and $600 for married couples filing jointly.

To qualify for the rebate in Group 2, the individual must have either:

At least $3,000 of any combination of earned income, Social Security benefits and certain veterans' benefits (including survivors of disabled veterans), or

Net income tax liability of at least $1 and gross income greater than the sum of the applicable basic standard deduction amount and one (two if a joint return) personal exemption ($8,950 for singles, $17,900 for joint filers).

Unlike Group 1, Group 2 doesn't have any phase out or additional limits. As long as the taxpayer meets one of the two requirements above, the maximum rebate will be issued.

HOW CAN YOU CLAIM YOUR REBATE?

If you file a 2007 income tax return (that's the tax return due April 15, 2008), the IRS will calculate the rebate amount for you and will send it by mail or direct deposit without your having to take any further action.

If you don't file a 2007 tax return but still qualify for a rebate because of your earned income level, combat pay, or receipt of Social Security benefits, the IRS has promised to announce how you will get on the rebate list.

WHAT IF YOU EXTEND YOUR 2007 TAX RETURN?

Because the rebates are based on your 2007 return, if you file your return after April 15, 2008, your rebate will be delayed. For example, individuals on extension this year who do not file their 2007 return until the extended October 15, 2008 deadline will not receive their checks until year-end. No checks will be sent after December 31, 2008.

Read about the benefits of extending your tax return.

After 2008, those who missed out on the rebate or received only a partial rebate get a second shot at qualifying with 2008 data when they file their 2008 return in 2009. This group includes those who did not receive a full $600/$1,200 check either because their 2007 income was either too low or too high, or they did not receive a full $300 child credit because their income was too high or a child was born or adopted in 2008. They get another chance to claim the difference based on their 2008 tax return filed in 2009. If a taxpayer would have received a smaller rebate check if based on 2008 return information rather than his or her 2007 return, however, the taxpayer is not required to give back the difference.

WHEN WILL YOU RECEIVE YOUR REBATE?

Congress has directed the IRS to issue rebate checks "as rapidly as possible." No specific date has been released yet, but it's likely that the process will start in May. The government is also likely to utilize direct deposit as much as possible rather than issuing paper checks. Overall, the government will have to issue or deposit more than 130 million checks, so the rebate process will take some time. When we learn how the government intends to issue the checks, we'll let you know. Also, if you owe any federal debts or unpaid child support, the government will apply your rebate to that debt.