Up to this point it appeared that you would either receive $300 or $600 (double for married) as part of the economic stimulus plan. $300 if you owed no taxes, $600 if you did. According to the fact sheet just released by the IRS, (FS-2008-15) this is not the case.

The fact sheet gives examples of how the economic stimulus rebate will work. The only folks getting the full $600 will be those who paid at least $600 in taxes. It appears the only thing that will not offset this $600 is the child tax credit.

So, a married couple within the income limits who owe $1500 in taxes before applying the child tax credit would receive a $1200 rebate plus $300 for each kid under 17. If they only owe $700 then they will only receive $700 plus $300 per kid. If they are lucky enough to only owe $200 then they will still receive $600 (wealth redistribution factor).

So, with 4 kids under 17 I will receive $1200 plus at least $600 and possibly $1200 since the the child tax credit ($4,000) does not reduce the calculation for this rebate.

Looks like the economic stimulus package is just waiting for the President’s signature to go into effect. Details of the tax rebates will still be worked out but if you qualify, single tax filers can receive rebates of as much as $600. Joint filers can receive rebates of up to $1,200. In addition, each dependent child under 17 can add another $300.

Those who have incomes of at least $3,000 but owe no income taxes because of credits and deductions only get $300 if single or $600 if filing joint. If you have a modest income, but have 4 children you get $1000 per kid for the child tax credit this year. I can see having to try to figure out how to not claim some deductions so a person can at least owe $1 in tax!

The feds want you to spend this money to stimulate the economy. I would rather stimulate my bottom line. My question is, what are you going to do with your ‘free money’? Are you going to go out and buy a new refridgerator and stimulate the economy or are you going to do the smart thing and either pay off a credit card or sock the money away into savings?

If you’ve bought anything electronic from a chain store like Best Buy, Circuit City, Staples, etc, you were asked (repeatedly) to purchase an “extended warranty”, aka a service agreement, service contract, or maintenance agreement. Hopefully you declined but if not, or are tempted to do so in the future, there are some disturbing facts that every knowledgeable consumer should know.

Retailers forcefully encourage you to buy these extended warranties because they are cash cows. Stores keep 50 percent or more of what they charge for these warranties. They make a better profit on the warranties than they do selling the actual product. Consumer Reports feels so strongly that extended warranties are a bad deal and that consumers are being misled about them that in 2005 they took out a full-page ad in USA Today to warn shoppers.

Extended warranties are notoriously bad deals for the consumer since most electronics either will fail early, while still under the manufacturers warranty, or will have a long life, living well beyond the extended warranty period. If the product does fail, the repairs normally cost about the same as what was paid for the extended warranty.

Should your item break while covered by the service plan, you have no leverage with the repair company since you have already ‘paid’ for the service.

Not only will you probably have to wait for it to be fixed but you will not be the one who determines how it gets fixed or who does the fixing.

Extended warranties are not only are a waste of money, when you do need to use them they just add to your frustrations.

Some alternatives you may want to investigate:

Check your credit card.
Find out if your credit card provides similar coverage. Most gold and platinum cards typically lengthen the original manufacturer’s warranty by as much as one year.

Compare what the retailers offer.
Some retailers might extend the warranty. Costco no longer has their ‘replacement for life’ policy but require most of their suppliers to extend the manufacturer’s warranty to 2 years from the date of purchase.

Shop around.
If you feel you must buy the extended warranty, do some comparison shopping. Not only do extended warranties vary in length and terms, you can always attempt to negotiate a better price.

You can pity the salesperson who is trying to sell you a warranty. Their job performance is measured on how many extended warranties they sell. If they do not meet their quota, they could loose their job. But that is a reason to feel sorry for them, not a reason to buy the warranty.