Free From Broke

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American Recovery and Reinvestment Act of 2009

Use The First Time Home Buyer Tax Credit Now!

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Were you considering buying a home this year and claiming the first time home buyer’s tax credit? If you were, a recent change to the credit may allow you to use it now rather than waiting until next year’s tax return.

The American Recovery and Reinvestment Act of 2009 allowed for a first time home buyer’s tax credit of up to $8000.  This would be money that could be claimed on your tax return.  Recent changes now allow a first time home buyer to apply the tax credit toward their down payment or closing costs.

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How The American Recovery And Reinvesment Act Of 2009 Can Help You

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Last week President Obama signed into law the American Recovery And Reinvestment Bill, otherwise known as the 2009 Economic Stimulus. A big question in the minds of the average American is How can it help me?!?

Here are some ways the American Recovery and Reinvestment Act of 2009 can help you:

  • Unemployment – In 2009 you will not have to pay pay taxes on the first $2400 in benefits you receive.
  • Social Security – Some social security recipients will receive a $250 refundable tax credit mailed to them within 120 days of the bill’s signing.
  • Pell Grant – The maximum benefit for Pell Grants will rise to $5,350 in 2009 and $5,550 in 2010.
  • More Liberal 529 Plan – In 2009 and 2010 students can withdraw money or computers and related technology such as educational software or internet service for students living at home.
  • Transportation Accounts – Your employers are able to increase transportation spending accounts up to $230 a month.  This is money you can have set aside from your paycheck tax free. (Check with your employer to see if they participate and raised their limits.)
  • New Car Buyer Tax Deduction – In 2009 you, if you purchase a new car you can deduct the state, local, and excise taxes off of your federal return.
  • Higher Tax Credit For Education – A credit of up to $2500 of college tuition and related expenses in 2009 and 2010.  You need to spend at least $4000 in the year for the credit and 40% is refundable (which means you can qualify for 40% if you don’t have taxable income).
  • First Time Home Buyer Credit – A first-time home buyer credit of 10% of the purchase price of the home up to $8,000 for homes bought in 2009.
  • Health Insurance Help for Laid Off Workers – If you were laid off between September 1, 2008 and December 31, 2009 the government will subsidize 65% of your COBRA premiums.

The American Recovery and Reinvestment Act is going to be expensive for the country but at least people get to see some of it.

What do you think?  Is it enough for the average person?

Source: NY Times

photo credit: pfala

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