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You either have or will ask yourself this question: Will the tax rebate reduce my 2008 refund? The answer is a firm yes and no. Let me show you why.

Let's assume that you are married, have two beautiful kids ages 6 and 8, and received an $1,800 rebate based on your 2007 return ($1,200 base amount and $600 for your little darlings). Okay, so you go to file your 2008 return, and this is what happens --- I'm going to start with the tax before credits, because how I got there is beside the point:


Okay, so now let's say you didn't file your 2007 return in time to get the rebate. Hey, stuff happens. Now when you go to file your tax return, this is what things looks like:


Don't make me come over there! Yes, the refund in the second scenario is higher, but the total amount received is the same. You got $2,300 in both cases; you just got the some of it in advance of filing your 2008 return. In other words, you got it early, but you got it in the first scenario so you won't receive it again.

So even though your refund is less than it would be if you hadn't received the rebate, you still get the same amount of money. But in the second scenario, you had to wait months to get $1,800 you could have gotten had you just filed that 2007 return on time. So the best advice: file that 2007 return...

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