Tax Rebate Confusion

Apparently most of my coworkers were confused about the tax rebate.  They fully expected to receive the complete amount of the rebate and didn’t know it was based on income.  What followed was an hour long group rant about how the government confused everyone and how they were expecting a certain amount which they’re not going to receive.

What a lot of them were saying was that they had already spent the money on new splurges before even receiving the money in the first place.  Since they spent money they didn’t have, that effectively puts them in debt.  Kind of ironic since the money was meant to help the American consumer and instead put them into more debt. Also, this was Bush trying to end his 2nd term on a good note and in the end, it kind of just pissed people off more towards him.

I already knew that it was based on income but I had assumed that since my income is quite low, I would receive the whole rebate.  However, I had no idea that if I received a refund (meaning no net income tax liability), I would only be receiving half the amount.  So, when I saw the amount of money in my bank account on my computer screen, I immediately pulled out my budget and dialed everything down.  Thank goodness I hadn’t splurged as much as I had intended to do.

But hey!  Better to receive less money than expected than to pay money to the IRS.

The take home lesson:  Don’t spend what you don’t have and always leave some flexibility in your budget

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