Here’s a quick look at some of the tax breaks the new stimulus plan authorizes (for a more detailed look see the Wall Street Journal):
1. Making Work Pay
tax credit. An eligible worker would get
6.2% of earned income up to a max credit of $400 (for two income earners it’s
$800). What this means is that workers
would see an extra $12-$20, per pay check.
If you make more than $95,000 (single) or $190,000 (couples) you will
not qualify.
will get a tax break in the form of a $8,000 subtraction from the income tax
they owe (on a principle residence purchased through 11/31/09). There is a phase our for individuals earning
between $75,000 – $95,000 and couples with an income of between $150,000 –
$170,000.
Minimum Tax increases exemption to $46,700 for individuals and $70,950 for couples.
job you will be able to forgo taxes on the first $2,400 of unemployment
compensation (in previous years, all income from unemployment was taxable).
to deduct sales tax on a new car purchase. (for purchases up to $49,500 from
the day the stimulus starts through the end of 2009). Of course, the deduction phases out for
singles with a salary between $125,000 – $135,000 and couple earning between
$250,000 – $260,000.
your job, maintaining insurance through your old provider got easier in the
form of a 65% reduction in cost. Cobra
costs also get cheaper. There are also
qualification in terms when you got laid off.
Opportunity education tax credit allows for a $2,500 partially refundable tax
credit to cover all four years of college. (this goes until 2010 and thereafter
the Hope Credit comes back into play).
college savings plan you can use withdrawals in 2009 and 2010 to purchase a
computer or “computer technology” (previously the college needed to stipulate
that a computer was needed for study).
this was very informative