Q: My question is regarding the rebate . . . . Are we going to have to give this money back when we do our taxes for 2008?

— R.G., Johnston

A: No.

Many other MoneyLine readers have also raised this issue. Here’s the short answer:

The rebate that you receive this year, as a result of the new federal economic stimulus law, won’t count against you when you do your federal income-tax return next year, the return covering 2008.

Some readers have asked whether the rebate is simply a loan, an advance against your refund next year.

The answer is no. It’s a freebie. So enjoy it, and quit worrying about next year.

Linda Stiff, acting commissioner of the Internal Revenue Service, put it this way: “No one will be impacted adversely” next year as a result of receiving a rebate this year.

IRS spokesman Terry Lemons acknowledged that some taxpayers have the mistaken impression that receiving a rebate this year will somehow reduce the amount of their refund next year.

Why? I think it has to do with the way the law reads. It’s complicated, and if you don’t review it carefully, you might easily draw the wrong conclusion.

Here’s the deal:

The new law created a special tax credit, which will appear on your return next year.

But instead of waiting until next year to receive the benefit of that special tax credit, you’ll receive it this year, in the form of a rebate.

What happens when you file your return next year? You’ll have to account for the rebate you received, Stiff said. But it’s only an accounting; you won’t have to give the rebate back, she said.

Here’s how it’ll work:

When you fill out your federal return next year, the IRS essentially will ask you, on that return, if you received a rebate in 2008.

If you did, you won’t be able to claim that special, one-time credit mentioned above. But you’ll still be able to receive the full amount of any refund that would otherwise be due you.

What if you did not receive a rebate in 2008? You may be eligible to claim that special, one-time credit on your return next year. It’ll be in addition to the full amount of any refund that would otherwise be due you.

Still confused? Maybe the following example will help:

Suppose your circumstances remain just about the same from year to year. Suppose, too, that you carefully arrange your financial affairs so that you wind up receiving a federal income-tax refund of $1,000 each year.

Let’s also say that you receive a rebate of $600 this year.

How much of a federal income-tax refund will you receive next year? The same old $1,000.

Mark A. Luscombe, a lawyer, accountant and principal analyst for tax publisher CCH Inc., a Wolters Kluwer business, put it this way: If you receive a rebate this year, it will not reduce the amount of the federal income-tax refund that you would ordinarily receive next year.

Keep in mind, however, that if you receive a rebate this year, you won’t also be able to claim that special one-time credit next year, Luscombe said. It’s one or the other; you won’t get both.

One more important point: Depending on your circumstances, that special one-time credit could benefit you next year – even if you receive a rebate this year, IRS spokeswoman Peggy Riley said.

For example, suppose you’re married, file a joint return, and both spouses work full-time.

This year, you’ll probably receive a rebate of $1,200 (assuming you qualify under the rules). You won’t receive the additional rebate amount of $300 per child this year, because you have no children.

What if you have a child later this year? When you do your return next year, you’ll be able to get that $300 rebate amount at that time, except that it will be in the form of a credit on your 2008 tax return, reducing your overall tax liability.

So the bottom line is this: When you do your tax return next year, the rebate won’t hurt you. It could even help you, depending on your circumstances.

Q: I’d like [the] 1040A form please.

— C.S., Richmond

A: I don’t supply federal income-tax forms, but you may obtain a Form 1040A easily enough by visiting your local IRS office. Or you can call the IRS toll-free, at 1-800-829-3676, to have a copy mailed to you at no charge. Or download a copy from this IRS Web site:

www.irs.gov/formspubs

Don’t forget, too, that there are volunteers available throughout the region who’ll prepare and file your return for you at no charge, including returns prepared on Form 1040A.

To locate a volunteer tax preparation site near you, call the United Way hot line at 211, the IRS’ Volunteer Income Tax Assistance (VITA) program toll-free at 1-800-906-9887, or the AARP Tax-Aide program toll-free at 1-888-227-7669.

In your question to MoneyLine, why did you ask specifically about the Form 1040A? I’ll bet it has to do with the rebate.

If you have a low amount of income, and don’t ordinarily file a tax return, you may be eligible for a rebate if you had at least $3,000 in “qualifying income” in 2007, such as Social Security benefits or veterans benefits.

If you’re in this category, you’ll generally receive a rebate of $300 if you’re single, $600 if you’re married and filing a joint return.

But to obtain a rebate, you must file a return this year, listing the amount of your qualifying income, and giving the IRS the other information it needs — such as your name, address and valid Social Security number — to process your rebate payment.

If you’re in this category, the IRS recommends — but doesn’t require — that you use Form 1040A.

Q: There is an IRS office in downtown Providence. I would like the address.

— J.O., Pawtucket

A: It’s at 380 Westminster St., Providence.

TODAY’S TIP: The U.S. Department of Labor (DOL) has published “Taking the Mystery Out of Retirement Planning,” a booklet intended to help you plan for retirement.

For a free copy, call the DOL’s Employee Benefits Security Administration toll-free at 1-866-444-3272, or use this Web site:

www.dol.gov/ebsa

(Look under “Publications”.)

The agency also has a series of interactive worksheets, available online, as a companion to the booklet. If you’re 10 to 15 years from retirement, you can use the worksheets to help calculate your income and savings and to project your expenses in retirement.

U.S. Secretary of Labor Elaine L. Chao said in a statement that the worksheets “will give workers and their families a better perspective on how much they need to save to ensure that they can realize their retirement dreams.”

Although the worksheets and booklet are intended for people approaching retirement, they may also be helpful to recent retirees, the agency said.

The worksheets are available at this site:

www.dol.gov/ebsa/publications/nearretirement.html

Questions about your money matters? Call us at 1-401-277-7484 and leave a message, or e-mail:

moneyline@projo.com

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