I get at least a few emails a week asking for more details about the economic stimulus package, so I figured I would go looking for a couple more examples of how it will be affecting you. I already wrote about the cash and paycheck aspects of the stimulus, but there is much more to it than just that.
First and foremost, and something I was worried about, is a change in the AMT exemption. We have come very, very close to this for years, and this year would have been no exception. But thanks to the change in the rules and my self-employed income/write-offs, we missed it again this year. There is a $500 increase in the AMT exemption for individuals making up to $46,700 and a $1,000 increase for couples making up to $70,950. This should supposedly stop over 25 million families from having to pay the AMT, which is great. (By the way, AMT means Alternative Minimum Tax, which is an alternative way of figuring your taxes. The AMT does not allow for the standard deduction, personal exemptions, or certain itemized deductions.)
If you collect social security or disability, you will get a one-time $250 check in a few months. This is because you are not collecting a paycheck to have your taxes reduced inside of, so the government is going to send you a check instead.
Are you thinking of buying a new car? You can deduct state and local sales taxes from your tax return, for purchases up to $49,500. This is only for new cars, so I unfortunately cannot write-off the purchase of my new/used Jeep I bought earlier this year.
If you are a first-time home buyer and buy a house in before December 2009, you can take an $8,000 tax credit that you don’t have to pay back. This is one that I would like to take advantage of, if we can find the house we want AND we can get approved for a mortgage while I am self-employed.
Laid off? You can get an extension of your previous employer’s health-insurance plan, and the government will give you a 65% subsidy of that cost for 9 months. This is very helpful, as paying for Cobra is usually out of the question for many, many people. I remember when I was laid off in 2000 from a dot-com company, and my Cobra insurance would have cost me $600 a month! And for anyone receiving unemployment benefits this year, you won’t pay any federal income taxes on the first $2,400 you receive.
Looking to go green? Homeowners who add energy-efficient windows, furnaces and air conditioners can get a tax credit to cover up to 30% of the costs, up to $1,500. Yet another reason I wish I owned this house…
If you are heading to college soon, there might be more money available for you. The maximum Pell Grant, which helps the lowest-income students attend college, would increase from $4,731 to $5,350 starting July 1 and $5,550 in 2010-2011. Supposedly an extra 800,000 students would now get Pell funding who would not have been able to before.
I could go on and on, as the list of projects being included is very long. But I wanted to concentrate on what was being done on an individual basis and not on the general welfare of the country. These are the ones I found out about; if I am missing anything that affects people as individuals, be sure to let me know!