Tuesday Tax Time (the Wednesday Edition)

Last week we detailed how the most recent stimulus bill will affect individuals.

And I was going to focus on the provisions meant to help the small businesses this week.

But I think it’s important to touch on what the FINAL provisions of the bill (about $787 Billion worth) are, and how they may affect you and me.

Here are some provisions you may be interested in :

1.  Credit for First-Time Home Buyers.  The amount has been increased to $8,000 if you buy a home between 1/1/09 adn 12/31/09.  You don’t have to pay back this refundable credit anymore (unless you sell the home within three years of buying it).

2.  Make Work Pay.  In 2009 and 2010, everybody working will get an extra $400 at tax time ($800 if a married couple works) through the “Make Work Pay” credit.  It will be a refundable credit, calculated at 6.2% of your earnings.  But I thought working already paid – it’s called a paycheck.  Man, that will barely get me a Kindle 2 from Amazon. 

3.  Payments to Retirees.  A one time payment of $250 will go to retirees, disabled individuals and those receiving Social Security Income.  That will only get you about 11 Snuggies (as seen on TV).  I guess you could give them as gifts!

4.  More on the Earned Income Tax Credit.  If you have a third kid, you can get more on the earned income credit now.  Strategy: the married couple needs to keep that income down to just over $21k or it will start to phase out.

5.  Lower Tax on Unemployment Benefits.  If you are getting unemployment checks, then you won’t pay federal tax on the first $2,400 of the money.

That’s all for now, maybe I’ll highlight the business savings in the bill next week.

Peace to you.

Thanks, Jason M. Blumer, CPA