There seems to be much confusion about the IRS rebate checks many people received last fall. These were the checks that came out weekly, starting in September, based on the last digits of your social security number. Most married people received $600.00. Most single people received $300.00.

I wanted to clarify several points about these so-called 300/600 rebates. One is that they are not taxable as income in 2001. This is free money. The other key point is that, if you received the full $300.00 or $600.00, there is nothing you have to do on your 2001 tax return. Only those people who did not receive the full amount will be using the worksheets and showing amounts on page two of Form 1040.

The best part of all is that if you received too much money, you don't have to pay it back. It is difficult for me to understand the logic behind this, but this is tax law. If it doesn't make sense, it is probably correct.

These rebate checks were a prepayment on the refund you will be receiving this spring on your 2001 tax returns. As such, they do reduce the amount of your refund. But, as some people might think, you are not out any money. You just got your money earlier than normal.

In conclusion, don't let these rebates confuse you. If you received the full amount, you are all set. There is nothing more to do on this tax return.

Feel free to call me with questions at 608-250-9926 or email me at charlie@libertyprofessionalservices.com.