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My Not-So-Stimulating Economic Stimulus Payment Has Finally Arrived

Published 7/9/08 (Modified 3/9/11)
By MoneyBlueBook

After months of waiting and checking my mail box regularly like a little kid waiting for his video game to arrive, I was finally relieved to discover a little envelope from the United States Treasury yesterday - my long awaited 2008 Economic Stimulus Payment check had finally arrived! Cha-ching (punctuated with a few obligatory fist pumping motions).

Actually, about a week ago I had already been given written notice that the check was on its way. I received one of those pointless waste of paper junk mail letters from the Internal Revenue Service (IRS) letting me know that I was entitled to an economic stimulus payment check as provided by the Economic Stimulus Act of 2008, and to expect its arrival in a week or so. The letter also provided a simple breakdown of how the federal government calculated my small time stimulus payment.

But what was the point of sending this predecessor letter out to let me know this? Why is the IRS and federal government so oblivious and wasteful when it comes to wasting millions of dollars on paper and delivery costs to send out these pointless letters? Why not just combine the calculation breakdown letter with the actual stimulus rebate check that I received yesterday rather than sending them separately on different weeks? The financial savings for the federal government could easily have been several million dollars. Especially since we are now in an economic recession and the government keeps griping and raising issues about needing to balance the budget, and even some of the presidential candidates like Barack Obama keeps talking about raising taxes against those with higher incomes to pay for more federal government programs, why not practice some fiscal sense now by adopting real cost cutting techniques? The government's habitual wasteful spending activities truly baffles me sometimes.

How My Economic Stimulus Tax Rebate Was Calculated

While I had hoped to receive my economic stimulus rebate via direct deposit, because I filed my 2007 tax return through TurboTax and actually owed a sizable amount of taxes, I was not able to provide my bank account routing numbers on my tax return for direct deposit purposes. Thus I was one of many who had to wait for my economic stimulus check to be mailed via the postal service.

Taking a look at my rebate, here is how my actual stimulus payment was broken down, in case you're wondering. Because my adjusted gross income on my reported 2007 federal income tax return was above $75,000, the IRS reduced my stimulus payment by 5% of the amount of my adjusted gross income exceeding $75,000. As such, with my single filing status starting qualification amount of $600 increased by $0 for my lack of qualifying children, but reduced by $230.25 for the adjusted gross income limitation, my final calculated stimulus payment turned out to be only $369.75. It's not a whole lot, especially since the cost of living in my D.C./Maryland suburban neighborhood is pretty high, but I suppose every little bit helps me pay the bills in the grand scheme of things.

How I Plan To Spend My Economic Stimulus Check, and Its Impact On My Future 2008 Tax Return

I'm obviously elated to receive my tax rebate check finally after all these months, but after looking at the relatively small amount, it sort of leaves me wondering, how is this small amount of money really supposed to stimulate the economy to any significant degree? While the check is certainly free windfall money in the sense that I wasn't really expecting it or planning for it until recently, the amount isn't really large enough for it to be good for much.

I considered several financially smart as well as a few fun but reckless ways to spend my tax rebate, now that I have it in my hand. Here are the choices and possible options I came up with:

  1. Use the economic stimulus payment to help pay my rent - The downside is that with a pricey monthly rental obligation of $1,425.00, this small economic stimulus payment isn't likely to make much of a dent in my case.
  2. Deposit the small stimulus rebate into my high APY savings account to earn interest and help build up my backup emergency fund - I usually try to keep at least enough liquid cash in my savings account to last 6 months. I advocate more emergency fund savings than most, but I think this offers greater peace of mind. In this recession, you never know what unfortunate events may strike when you least expect it - everything from out of the blue vehicle repair charges to sudden unemployment necessitating the need to file for unemployment insurance benefits.
  3. Save the stimulus rebate for retirement and contribute the amount towards my Roth IRA retirement fund. This is a good way to plan for the future. Great for you, but not so good for the economy (at least for the present time).
  4. Pay off debt - While this sounds like a logical choice, other than my usual monthly revolving credit cards bills that I always pay off in full, my 0% APR balance transfer credit card arbitrage funds, and my very low interest student loans, I don't have significant debt that demands my immediate attention to speak of. I think I've done a pretty good job of managing debt.
  5. Spend the money and actually help directly stimulate the economy by injecting it back into the stream of commerce - Possibilities include using it for discretionary entertainment reasons like spending it on expensive movie tickets or even just using the amount to pay for necessary driving expenses brought about by spiraling high gas prices.

After much thought, I decided to deposit the amount into my high yield savings account like a good grasshopper (or was it the ant) and save for a rainy day. Why change my frugal savings minded personality just because I came upon some windfall money? I'm the type of person who would probably still drive around in a rain storm for a free car wash to save some money as a force of habit even after winning a lottery for millions.

As for the taxation aspects of the economic stimulus payment, due to the terms and nature of the Economic Stimulus Package, recipients of the tax rebate such as myself will not have to report the amount of our stimulus payments as taxable income on our 2008 federal income tax returns. The amount is indeed free money and not something we will have to pay back or pay taxes on. Furthermore, if any recipient also received any other federal benefits or federally financed benefits, those benefits generally will not be affected by any stimulus payment received as well.

Where's My Economic Stimulus Payment? Ask The Almighty IRS

For those of you who are still waiting for your stimulus tax rebates with bated breath, you should utilize this handy IRS stimulus rebate tool to locate the status of your economic stimulus payment. It should be able to answer your most pressing tax rebate question. To use the online tool and verify your identity, you'll need to provide your social security number, your filing status, and the total number of your exemptions.

If you still are not able to obtain a satisfactory answer, you may want to visit your local Taxpayer Assistance Center for help or call the IRS via the Rebate Hotline at 1-866-234-2942 for updates.

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6 Responses to “My Not-So-Stimulating Economic Stimulus Payment Has Finally Arrived” 

  1. C Edwards says:

    I still don't have mine. In a few days I am going to call if it has not arrived.

    Although it will not do much to stimulate the economy, my vote would the the Roth IRA.

    I hope you are stimulated by this check.

  2. L Martinsen says:

    I just got mine. only 33 dollars and change.. I made very little over $75000. I wonder why people who made more got more.. shouldn't the inverse be true?

    I was wondering what the caviat at the bottom about saving the (worthless) piece of paper from the IRS stating how much I received back incase i qualify for more next year based on my income....do you know what that means?

    thanks for the helpful web site.
    (ps, i don't have to worry about what to do with my check.. i inadvertantly spent it on the way home from work getting gas.)

  3. Raymond says:

    L Martinsen,

    I suspect the people who made more but got a bigger stimulus payment likely had qualifying kids to take care of as well. $33 I see...wow that is rather underwhelming. I would advise you not to spend it all in one place but I guess you already have!

    I've already thrown the IRS letter away. But the purpose of the notice was to draw your attention to the fact that if your life circumstances change during 2008, you may be able to qualify for more economic stimulus payment money when you do your taxes on April 15, 2009. Such changes would include getting married or acquiring qualifying kids for tax rebate purposes through marriage etc.

  4. pam says:

    If you are so UNSTIMULATED by your stimulus check why don't you donate it to the needy instead of complaining about the so-called junk mail that you received etc.

  5. Raymond says:


    Junk mail doesn't bother me. As I mentioned in this post, it's the wasteful government spending that annoys me. The stimulus bill is fine...it's the fact the government decided to spend tens of millions of dollars to send out junk mailers letting us know we are getting our checks when the info's already all over the news. The only thing I can really do about that problem though is to vote. But then again, I've never encountered a politician who wasn't ultimately a money waster.

  6. pam says:

    I apologize for my snotty post, Raymond. I shouldn't take out of my bad moods on you. You did nothing to me. Again, I apologize.

    I didn't get my check yet. I was told "there is a delay." I am on disability and also work and because I sent in the form that came to me from the IRS about being able to get the check since I am on SSD I sent it in. That confused them, I guess and they want to make sure that I didn't file for the stim twice, or something or other.

    But anyway, I was supposed to get mine June 8 or so and it never came. I need it and I keep checking everyday and nothing. I am p.o.'d and need it bad.

    Anyway, you have a nice night/day.

    Take care.


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