How will you fare with the new 2009 Stimulus Package that has been passed by Congress and signed by President Obama? Will you look back and say you are better off than in previous years? Here are the raw details that affect you.
More Take-Home Pay. This year you will find more money in your paycheck because employers will be withholding less in taxes for you. This means no tax rebate check like last year. The total amount is $400 for single filers and $800 for joint with adjusted gross incomes of below $75,000 and $150,000 respectively. If you are self-employed you will have to adjust your quarterly tax filings in order to take advantage of this incentive.
Low-income persons. You will see a temporary growth of the earned-income tax credit for families with three or more children. Also, low-income families will receive a refundable child tax credit this year and next. Food stamp recipients will see a 14 percent increase in this assistance as well.
The Disabled or those living on SS. There is a one-time economic recovery payment of $250 within 120 days for those in this income category. There will be more information coming which can be accessed through the Social Security Administration’s website or AARP’s site as well in the very near future.
The Unemployed. There will be no Federal taxes on the first $2,400 of unemployment benefits. Also, those benefits that were supposed to be phased out in March will be extended into December with an increase of $25 per week for a total of $325.
No health insurance. There is a subsidy of 65 percent for those who purchase Cobra coverage to keep health insurance in place if you have lost your job. This has a life of nine months. This assistance is available to any worker who was laid off from September 1, 2008 through December 2009.
Buy a vehicle. You will be able to deduct the sales tax on any new vehicle purchase made from now until the end of December 2009. This deduction is available for those who make $125,000 or less for single filers and $250,000 for joint filers.
Tax credits for home purchases. The stimulus package addressed the needs of the first-time home buyers only. The tax credit for those buyers was raised to $8,000 from $7,500. Also, there was a re-payment clause for this credit which has now been removed in this stimulus package.
While arguably not the best stimulus package that one could desire, there are provisions that can help provide relief to low and middle income wage earners and provide some semblance of a parachute in the unfortunate circumstances that surround the loss of a job, etc.
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3 users resposed " Tax Benefits in the 2009 Stimulus Package for Low Income Earners "
December 28 2009
What tax breaks do we have? Owner of 6 houses with 5 rented out. Because of the economy situation we lowered the rent according to what the people could pay. Can we count this in any way?
December 28 2009
I signed a note for someone and because of the economy this persons business failed and had to pay the note. Can we count this?
December 28 2009
I signed a note for someone to help him in his business and because of the economy and with gas prices jumping so high the business went in under. We had to pay the note. Are there any way we can count this as a deduction?
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