Monday, April 28, 2008

Tax Rebate Checks on their way!!

Rebates start landing in bank accounts: How will we spend?

As first tax rebates show up in checking accounts, many Americans eye groceries, not fancy TVs

NEW YORK (AP) -- Tax rebates have begun dropping into bank accounts, but in this economy, gas and groceries may trump a high-end TV, a fancy dress or a new sofa -- making the checks less of an economic jump-start than the government hoped for.

The first direct deposits from the Internal Revenue Service landed in bank accounts Monday, shoppers were already using the cash to play catch-up on the basics, such as milk and other groceries.

Analysts say the rest will probably be used to pay down debt.

Alicia Flaxman, a stay-at-home mother from Seekonk, Mass., was shopping at a Target store Monday and said she would use some of the rebate for food -- cheaper items like potatoes, not more expensive meat and fish.

"My bills are double," she said. "I go to the supermarket and I spend $200. I used to spend $120."

The rest of the money will probably go for summer clothes for her three children, she said.

The IRS aims to make 800,000 payments every day for the first three days of this week. No deposits will be made Thursday, and about 5 million on Friday.

How you receive the rebate depends on how you filed your taxes. Paper checks will go out beginning May 9. The exact timing for both direct deposit and paper checks depends on the last two digits of your Social Security number.

The rebates, which are expected to reach 130 million households, range up to $600 for individuals and $1,200 for married couples, plus $300 per child for eligible parents.

How will you spend your money? Joe and I, are very rarely frivilous..but we are doing something somewhat frivilous with our money! We are buying a flat screen tv and a new couch for the living room. Currently, the living room is a formal room, that is very rarely used. There is no tv in the we thought we'd get more use out of it by adding the tv and a big comfy couch! Yippeee! I can't wait to go shopping for it...

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