Many taxes payers are overwhelmed not only by the size of the recently passed $787 stimulus budget, but by all the details. Day after day, Americans have been hearing more stories of how the Federal funds are being used toward invigorating the banking industry, but know very little about how the government’s latest American Recovery and Reinvestment Act of 2009 will actually benefit them. There are many benefits being implemented that the general public at large can take advantage of.
- 95% of all American workers will end up with more cash in their pocket, courtesy of tax-cuts from their withholding-taxes. Starting in June, workers will see an average of $13 more per paycheck until the individual maximum of $400 of stimulus money is reached. The estimated total of cash in pocket for families is $800. The stimulus money will be distributed through 2008 and 2009 for single taxpayers who make less than $75,000,and couples that earn up to $150,000.
- Tax deductions for car purchases are part of the passed stimulus plan. Those who buy new vehicles after February 16, 2009 will be able to to write of the sales tax paid on the purchase. Car buyers are already being lured in by manufacturers with incentives and layoff-proof financing. The vehicle may not exceed a $49,500 purchase price and individuals making less than $125,000 ($250,000 for couples) are encouraged to shop and take advantage of the write-off.
- By purchasing your first home, between January 1- December 1, 2009 and meeting the same earning requirements necessary for the worker tax stimulus, you will be able to claim an $8,000 credit (up to 10% of home purchase price) on your 2008 or 2009 tax return.
- There are also additional stimulus provisions for energy efficient home renovations and paying off college education.
Much of this round of stimulus money is based on providing consumers incentives to spend more of their money in order to reverse the economic downturn, helping with growing unemployment and potentially ending the recession.