How Will the Stimulus Bill Help You?
The government’s actions to aid struggling businesses have garnered much of the media’s attention. However, the recently passed American Recovery and Reinvestment Act of 2009, more commonly known as the “stimulus bill”, also contains several measures designed to help individuals. Here are a few of the highlights:
In 2009 and 2010, workers will receive a tax credit equal to 6.2% of their earned income, up to $400 for individuals and $800 for married couples. Social Security, SSI, Railroad Retirement, and Veterans’ Disability Compensation recipients will receive a $250 credit.
First-time home buyers that purchase a primary residence on or after January 1, 2009 and before December 1, 2009 can claim a tax credit equal to 10% of the purchase price of the home, up to $8,000. Unlike the previous first-time home buyer tax credit, this one does not need to be repaid as long as you keep the home as your personal residence for at least three years.
If you purchase a new car this year, you can deduct the sales tax on your federal income tax return. If the car costs more than $49,500, you can only deduct the sales tax paid on the first $49,500 of the purchase price.
For workers who are involuntarily terminated between September 1, 2008 and December 31, 2009 and choose to continue health insurance coverage under COBRA, the government will subsidize 65% of the premiums for up to nine months. Those that turned down COBRA coverage before February 17, 2009 can enroll within 60 days of receiving notice from the former employer of the new regulations.
Most of the benefits are phased out at specific income levels. To find out more, visit www.irs.gov or consult with a qualified tax advisor.
For more information on the stimulus plan, visit www.financialstability.gov.