H.R. 5623 and tax credit extension

H.R. 5623 is a bill which the Congress has come up with extend the Home buyer tax credit by further 90 days (till 01 October 2010) and consequently stop the further deterioration of the housing market in United States. For details of the bill visit Tax credit extension - October 2010. This bill has indeed been passed by the house - read US House backs 2010 tax credit extension. It has to be still passed by the senate. However, it is expected to be passed by the Senate today.

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What is 401(k) retirement savings plan ?

401(k) is a retirement savings plan for a working individual in United States of America. 401(k) plans are sponsored by your employer. In this post you will find out a quick overview of the rules and regulations and the most important things you need to know about 401(k) investments.

401(k) investment options

Money contributed to 401(k) plans is invested in various mutual funds investing in Stocks, Bonds or Money market investments. There are two types of 401(k) plans based on who has control on how the money is invested.

1. Participant-directed 401k plans - These are plans in which as an employee you can choose how much portion of your money is invested in which particular financial instrument. Most 401k plans are of this type.
   
2. Trustee-directed 401k plans- choice of investment options is made by the employer.

It is best to find out from your employer if your plan is indeed of the first type (the most common category).

401(k) tax exemption rules

It is important to understand the tax consequences of your 401(k) contributions. The key points to remember are:

1. Investments in 401(k) plans are tax deferred. i.e. you do not pay income tax on your 401(k) contributions (at the time of the contribution), but you pay tax at the time of withdrawal.
2. The returns on your 401(k) are tax-exempt : You earn from your 401(k) investments in the form of interest or dividend or capital gains. The biggest advantage of 401(k) retirement plans is that these earnings are not taxable.

401(k) rules for early withdrawals

1. Pay income tax on 401(k) withdrawals: As explained above in 401(k) tax rules, you have to pay tax on the 401(k) withdrawal amount when you withdraw money.
   
2. 401(k) hardship withdrawals: Many employers allow 401(k) withdrawals only if there is a financial hardship, e.g. 1) pay medical expenses, 2) pay college tuition fees, 3) for payment or installments etc. in order to avoid eviction or foreclosure of primary residence 4) for funeral of a family member. What exactly qualifies as financial hardship for the case of 401(k) withdrawals is decided by your employer usually based on predetermined criterion.
   
3. 10% Excise tax for premature 401(k) withdrawals: Withdrawals from your 401(k) account before you turn 59.5 years old and (while you are still in service of the company) involves a penalty in the form of 10% excise tax on the withdrawal amount. Note that this excise tax is in addition to the income tax you pay on the invested amount. However you do not have to pay this 10% excise tax in the case when you are leaving your company after you are 55 years old or if you become disabled.
   

401(k) rules for loans

Although direct withdrawals from 401(k) involve a penalty, several (but not all) 401(k) plans allow you to take a loan on your 401(k) contributions at a predetermined interest rates. The 401(k) rules for taking loan (if it is allowed) are as follows.

1. The amount of loan you can avail is the minimum of 50% of your 401(k) balance or $50,000.
2. The 401(k) loan has to be repaid in 5 years, unless it is meant for purchase of a primary residence.
3. In case you take a 401(k) loan and decide to quit your job, you may have to pay back the outstanding loan balance in full. Otherwise the outstanding balance may be treated as a premature 401(k) withdrawal and maybe subject to 10% excise tax as mention above.

401(k) maximum limit rules and regulations

There is a maximum limit on the amount you can invest in all 401(k) plans in a given year and it is the minimum of the following two:

1. The maximum percentage of contribution limit set by your employer.
2. The maximum 401(k) limit as prescribed by the federal government. The 2010 401(k) maximum contribution limit is $16,500 for employees below the age of 50 years and $5,500 for employees over the age of 50.

401(k) Rollover rules and options

You have the following options to deal with 401k contributions in case you retire, quit or change your job and do not want to leave your 401(k) assets with your former employer.

1. 401(k) Rollover Option 1: You can choose to rollover your entire 401(k) contribution to an IRA account, which you will have to setup before the rollover.
   
2. 401(k) Rollover Option 2: You may be able to make a rollover of your 401(k) assets to a retirement savings plan offered by your new employer (which could be another 401(k)).
3. 401(k) Rollover Option 3: You can choose to receive all your 401(k) assets, without making a rollover. However, remember that you will have to pay income tax according to 401(k) tax rules mentioned above. Moreover it is mandatory for your employer to withhold 20% on the amount of your 401(k) withdrawal for Federal Income tax. You are supposed to pay the remaining tax (after this 20% withholding) when you file your income tax return. In addition to the income tax, you also have to pay 10% excise tax if your age is below 59.5 years (as mentioned in 401(k) early withdrawal rules).
   

401(k)- additional benefits like matched contributions

Several employers, as part of their pay-package, match the contributions in 401(k) account. I.e. if you invest $1000, your employer will invest an additional $1000 on your behalf, thus doubling your investment. It is worth finding out if indeed your employer matches you 401(k) contribution by directly asking your employer.

External useful links related to 401(k) contributions IRS 401(k) plan What is Roth 401(k) plan? Additional details on 401(k) withdrawals Learn more about IRA - Individual Retirement Arrangements from IRS website. Income limits on Roth IRA contributions 401(k) fidelity - Fidelity Personal workplace and Investing is the largest provider of 401(k) plans in USA. Other posts related to Tax breaks, tax deductions and tax credits that you may find useful. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. Cars- Cash for Clunkers - Car tax credit when you trade your old fuel inefficient car for a new one and get a rebate of $3500 or $4500. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension. Disclaimer The author of this web page is neither a legal consultant nor a tax professional. This article on 401(k) retirement savings plan is meant only as a general outline and may contain inaccuracies or errors.

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2010 Extension of First Time Home Buyer Tax credit

Good news for First Time home buyers in 2010. The Economic Stimulus Package of Obama had offered a great incentive to qualified First Time Home Buyers by way of a refundable tax credit of $8000. This incentive has been extended to 2010 for all U.S. Citizens and in certain cases even in 2011 !. Now all qualified home purchases made on or before April 30, 2010 are eligible for $8000 housing stimulus. In order to qualify you only need to sign a binding contract by April 30 2010, and you may complete your home purchase by June 30, 2010. Moreover, certain government employees - Military, Foreign service and intelligence community have one more additional year, that is until April 30 2011 to take advantage of Home buyer tax credit. If you want to read about this tax credit extension in great detail, please visit my Home Buyer Tax Credit and its extension details for a thorough study. For just a brief overview, continue reading this post.

Continue reading if you are a potential home buyer to understand the details and deadlines you need to meet in order to qualify for the refundable tax credit of 8000 USD on your first home purchase.

Do you qualify for 2010 First Time Home Buyer Tax Credit?

The criterion for qualifying for the 2010 home buyer tax credit remain the same as before. Hence, you may be interested in the old article on How to qualify for $8000 Home buyer tax credit for details. Here is a quick list of the criterion, together with the new deadline.

1. You need to be a first time home buyer, which by definition means that you should not have purchased or owned a principal residence anytime in the past 3 years. (either single or joint ownership). If you are married, both you and your spouse need to be first time home buyers.
2. The House must be purchased after November 2009. You need to sign a binding contract on or before Apr 30 2010. The deadline for completing the purchase of the house, once a contract is signed it June 30 2010.
3. In order to qualify for the tax credit, single taxpayers should have income less than $125,000 and married tax payers must have income less than $250,000.
4. Continue reading more details on the offical webpage Housing Tax Credit at a glance.
   

Is there a Home Buyer Tax Credit in 2010, 2011 and beyond?

Some people do qualify for $8000 home buyer tax credit even one year after the deadline of April 30 2010. According to this Federal Housing Tax Credit website, qualified service members who are ordered on a period of official extended duty may be eligible for this additional one year extension. Please visit the link above to know more about Tax Credit in 2011. For general U.S. Citizens, it is unknown whether the housing tax credit will be extended even further, after Apr 30 deadline.

Must Visit - Useful Resources for First Time Home Buyers in 2010

Please take a moment to visit one or more of the following official websites on 8000 housing tax credit stimulus and its 2010 extension.

1. Frequently Asked Questions on Home Buyer Tax Credit
   
2. IRS 2010 Extension of Home Buyer Tax Credit (some current home owners qualify)
   

If there are enough requests, more details of this tax credit will be uploaded. Feel free to post any specific question in a comment.

Federal Tax Breaks, IRS Tax Credits, Tax Rebates in 2009 Economic Stimulus Package and their extensions to that maybe of interest to you Cash for Clunkers - Is it Useful? Will there be a Second Stimulus Plan in 2009 or 2010? 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. Cars- Cash for Clunkers - Car tax credit when you trade your old fuel inefficient car for a new one and get a rebate of $3500 or $4500. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension. FAQ: Can you claim your $8000 first time home buyer tax credit in 2008 tax return itself or do you have to wait till you file 2009 tax return? The law allows any qualified purchases made in 2009 to be treated as if the purchase was made on December 31 2008. You can claim the $8000 first time home buyer tax credit in 2008 tax return itself by filing form 5405 according to the latest IRS ruling. Thus you can get the benefit of $8000 in 2008 tax return itself. Income Tax tip for first time home-buyers: If you know you qualify for the $8000 home buyer credit there is no need to wait to file your 2009 tax return in order to get benefit of this housing stimulus. First time home buyers are actually permitted to reduce their income tax withholding by the amount equal to housing credit, i.e. $8000. You can then use this 'extra cash' got by increase in your take home pay for down-payment ! Question (please answer in a comment): Was this article on First Time Home Buyer Tax Credit useful? Did it help you to decide if you qualify for the housing stimulus? Disclaimer The author of this web page is neither a legal consultant nor a tax professional. This article on first time home buyer is meant only as a general outline and may contain inaccuracies or errors. Please consult the official website of Federal housing tax credit for accurate information on this housing tax credit.

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Barack Obama & Joe Biden's Healthcare Reforms

Anyone who has watched the presidential debate of Obama and McCain will recall that Healthcare was one of the most prominent focus points of Obama's campaign. Finally the time has come when the actually promised Healthcare reforms will be signed into a bill. It is expected that the reforms will be passed by Senate and come into force by late this year (2009). This post describes some of the background in which these healthcare reforms will come into place and what one can actually expect from Obama's initiative on Health Care. The details of actual reforms are not out yet but as soon as they are, updates will be available on Investo Blog. You can subscribe to this blog's feed via RSS or Email to get the latest updates.

Rising Health Care costs in America - what is the exact problem?

The HealthCare costs in America are rising at a much faster rate than the salaries of an average American. Healthcare costs have increased four times the wages of an average American and the following four points underline the plight of United States healthcare system. (number from BBC).

1. Nearly 47 million people (out of total population of about 300 million) in United States are uninsured (without Health Insurance) since they cannot afford to pay health insurance anymore. That is a whopping 15.5% of the total population ! In addition to this, 25 million are under insured.
   
2. The percentage of employees with an annual deductible greater than $1,000 increased from 1% to 18% between 2000 and 2008.
3. Over 50% of all Personal bankruptcies in the United States are at least partially the result of medical expenses arising from inadequate coverage of health insurance.
4. As a nation, United States spends over $2.2 tn (or 16% of the GDP) on Health-Care. This is twice the amount of the average spending by other OECD countries.

A possible reason - Health Insurance companies as middlemen

Most individuals in United States buy their own Health Insurance from health insurance companies. Remember that the amount of health insurance premium paid by individuals not only covers the cost of actual medical treatment doctor's and hospital fees, but it also pays for the salaries and income of the Health Insurance companies. This in my opinion is an unnecessary burden on the individual and indeed it is quite high. Add to this the occasional healthcare scams that eat into millions of valuable dollars. So what is the solution? In my opinion the best solution is to minimize the role of middlemen - the Health Insurance companies. The only way this can be done is by Government run HealthCare schemes. This will be another step after bailouts that United States will have to take away from Capitalism.

What to expect in Obama's HealthCare reforms package

1. Most employers will provide employees with healthcare coverage.
2. Medicaid is currently a HealthCare program run by the United States government to provide healthcare to families with low income. According to proposals for new healthcare reforms, Medicaid will be expanded to cover more individuals.
3. House committees proposed a 1-5% surtax on Americans earning over $350,000 to pay for the additional costs which Government will incur in order to run its HealthCare reforms.

Obstacles to passing of Obama's Healthcare reforms package

The main obstacle or point of disagreement in passing the proposed Healthcare reforms is the revenue generating mechanism needed to fund the new reforms. President Obama failed to persuade Congress to cut tax deductions for wealthy Americans' charitable donations. Visit again for more updates.

Federal Tax Breaks, IRS Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you Hybrid Car Tax Credit Cash for Clunkers - Is it Useful? Will there be a Second Stimulus Plan in 2009 or 2010? 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. Cars- Cash for Clunkers - Car tax credit when you trade your old fuel inefficient car for a new one and get a rebate of $3500 or $4500. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

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If you are located in United States and planning to buy a new car, 2009 is perhaps the best time to buy a car, especially a Hybrid Car. In this post I will explain several reasons why buying a Hybrid Car in 2009 makes sense. If indeed there is any possibility that you will buy a car in the coming year, then spare 5 minutes of your time to read this entire post to see how Hybrid Cars can save you thousands of dollars with Government Incentives, apart from being environmentally friendly. Moreover, while buying a new Hybrid Car, you could also trade your old car for $4500.

What is a Hybrid Car?

Hybrid Cars have a conventional gas powered engine as well as a parallel rechargeable electric motor in order to achieve better fuel economy. Think about this - how much energy is wasted when your car is running at top speed and then you apply brakes? How about if this energy, instead of being wasted is used to recharge the Electric battery of your car? This is exactly what Hybrid Cars do. The combination of rechargeable electric battery and conventional fuel engine gives you almost twice the miles per gallon as compared to usual cars (see example below).

Top 3 Reasons to Buy a Hybrid Car - Government Incentives, Stimulus Package & Hybrid Car Tax Credits

The following are the top reasons which make buying a Hybrid Car the best option in 2009.

1. Auto Stimulus Sales tax deduction : The Economic Stimulus Package of Obama allows you to claim Tax deduction for Sales tax paid on your new car purchase, provided the new car costs less than $49,500. Click on the link to learn more about this new car incentive. This is available for all new car purchases, not just for Hybrid Cars.
   
2. Cash For Clunkers - Under this new Government Incentive, you can trade your old car for either $3500 or $4500 depending on the fuel economy rating of your old and new car. To read more about the qualifying criterion and tips, click on the link.
3. Hybrid Car Tax Credit : Hybrid Cars purchased after 2005 may be eligible for a Federal Tax Credit of up to $3400. This tax credit is slowly phased out once the manufacturer sells a given amount of vehicles. The exact amount of Hybrid car tax credit varies depending on the car model. To find out more about how much tax credit you get for various models of hybrid cars, visit the government website Hybrid Car Tax Credit details. Remember that the Hybrid Car tax credit is going to be slowly phased out once the manufacturer sell a fixed number of Hybrid Cars. So this tax credit will not be there forever.

Some Important Remarks

1. Toyota Hybrid Cars: Toyota has manufactured one of the most fuel efficient Hybrid Cars like Toyota Prius. Unfortunately, the Hybrid Car Tax Credit for all Toyota Hybrid Cars has been phased out.
2. Honda Hybrid Cars: Honda also has some of the most popular Hybrids like Honda Insight. Unfortunately the Hybrid Tax Credit for Honda Cars has also been phased out.
   
3. GM Hybrid SUVs : Most of Hybrid Cars of GM are actually Hybrid SUVs and although they are eligible for Hybrid Tax Credit and Sales tax deduction, they may not qualify for Cash for Clunkers program since they have a fuel economy rating of less than 22 miles per gallon.
4. Hybrid Car Tax Credits are still available on Hybrid Cars manufactured by Ford, Chrysler, Mazda and Nissan.
5. A complete list of Hybrid Cars, sorted by manufacturer is available on the Government website on Hybrid Car Tax Credit. The mileage or fuel economy rating of cars can be checked on the Government website fueleconomy.gov.
   

Other two reasons to buy a Hybrid Car are

1. Hybrid Cars have a better fuel economy rating and can save you hundreds or even thousands of dollars per year in Gasoline (explained below with an example).
2. Hybrid Cars are Green or Environmentally friendly.
   

How much can a Hybrid Car save you in Gasoline?

Let us look at a concrete example of how much can you save with a Hybrid car as compared to a non-hybrid car. Toyota Prius, one of the first popular Hybrid Cars in the market gives a mileage of about 45 miles per gallon. Other cars typically have a mileage of about 20-25 mpg and SUV's have a mileage of even less than 20 miles per gallon. So Toyota Prius Hybrid will give you at least 20 miles extra per gallon of gasoline. If the price of gasoline is even $2 per gallon, and you drive about 30-35 miles per day on an average, that translates into a savings of $600 per year at least ! Remember Gas prices are highly volatile and once the world recovers from the current recession, this savings can easily be thousands of dollars per year depending on how much you drive.

For those you car environmental concern is an additional very important reason to buy a Hybrid Car. Pollution and its effects on global climate are so drastic that changes in the climate have become blatant. In order to stop overusing world resources it is important that we turn our attention to more fuel efficient and less polluting vehicles. This makes Hybrid Cars an obvious choice.

Federal Tax Breaks, IRS Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you Hybrid Car Tax Credit Cash for Clunkers - Is it Useful? Will there be a Second Stimulus Plan in 2009 or 2010? 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. Cars- Cash for Clunkers - Car tax credit when you trade your old fuel inefficient car for a new one and get a rebate of $3500 or $4500. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

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Stimulus Package and plans are being talked about everywhere. The following three rebates, federal tax credits or incentives (whatever you call them) in economic stimulus plan are among the most important ones.
Housing Stimulus ($8000 tax credit for first time home buyers)
Auto Stimulus (Sales tax deduction for purchasing new cars under $49500).
Cash for Clunkers (A new car incentives program where you can get $3500 or $4500 for your old junk car).

This is in no way a complete list of all stimulus and federal tax credits. There is a lot more. The Solar tax credit, other renewable energy tax credits, tax credits for installing new efficient doors and windows, Making work Pay stimlulus, Cobra Stimulus, and lots of others. And moreover, we can already hear hints (or rumors?) of a second stimulus plan.

Is Cash for Clunkers really useful ?

Don't misunderstand me here when I use the word 'useful'. Of course the Cash for Clunkers is awesome if you are planning to buy a new car. This is a program where new car buyers can get either $3500 or $4500 for their old junk car (also called as clunkers). Yes, doesn't matter how old that car is or how much worth it is. Even if it is worth $100 or say even if it worth only weight of its scrap metal, you can get $4500 Cash for Clunkers cash rebate / discount voucher. Isn't that fantastic? Let me give you a quick overlook of the details involved in Cash for Clunkers program.

Cash for Clunkers Details

Does your Old Car qualify? If you have a Old Car made after 1984 and which has a fuel economy rate or mileage of at most 18 mpg (miles per gallon), your Old car is eligible for Cash for Clunkers cash incentive. You can find the fuel economy rating of your car on fueleconomy.gov.
Does your New Car qualify? In order to get the benefit of Cash for Clunkers, the New Car you purchase must cost at most $45,000 and must have a fuel economy rating of at least 22 mpg (miles per gallon).
How much Cash for your Clunkers? If both your Old car and New car qualify you can trade your clunkers for $3500. If it happens that your Clunkers is really really junk, i.e. to be precise the fuel economy rating of your new car is 10mpg more than that of your Old car, you get even more $4500.

Back to the debate, is Cash for Clunkers really useful?....
By useful here, I mean useful for the economy. There are various points of debate here. First of all the requirement of new car having 22mpg could have been raised in order to ensure that only the most fuel efficient cars are encouraged. 22mpg - Most of new cars (even some SUVs?) would fall under this category. Moreover, would this program lead to abuse? Since Cash for Clunkers can be used in addition to Auto Stimulus and Hybrid Car Tax Credits, this is perhaps the best time to buy car by using government incentives provided at the cost of taxpayers money. I would love to hear Opinion from the readers of this blog. Please share your opinion in a comment.

Federal Tax Breaks, IRS Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you Cash for Clunkers - Is it Useful? Will there be a Second Stimulus Plan in 2009 or 2010? 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. Cars- Cash for Clunkers - Car tax credit when you trade your old fuel inefficient car for a new one and get a rebate of $3500 or $4500. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

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Why there is a possibility of the Congress / Senate passing a second stimulus plan ?
The worst of the current recession may be over. There is increasing evidence coming from latest financial data to suggest this. However slowing down of recession should not be confused with recovery. It is likely that the recovery will take much longer than what is hoped by wall street speculators in the past week. This is one reason why a second stimulus package is very likely.

Thus we have a three word simple answer to why there will be a second stimulus - Slow Economic Recovery.

The current stimulus plan passed by Obama administration provides plenty of stimulus including the following :

1. Housing Stimulus for first time home buyers.
2. Auto Stimulus for New Car Buyers.
3. Cash for Clunkers - A stimulus to exchange your old fuel inefficient cars for a new one.
4. Making Work Pay Tax Credit.
   
5. SSI Stimulus Checks.
   
6. Cobra Stimulus Package.
   
7. Solar Energy Tax Credit Stimulus.
   
8. Home Efficiency Tax Credits for Insulations of Doors Windows, etc.
   
9. etc.

However, because of expectations of slow recovery it is now more and more likely that there will be a second stimulus plan announced by 2010 or even by late 2009, when a number of current stimuli get over. A comment from a Congressman published in the BBC article on Second Stimulus hint towards such a possibility. Also read an article by renowned economist Paul Krugman giving a message to the President on Second Stimulus.

Federal Tax Breaks, IRS Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you Will there be a Second Stimulus Plan in 2009 or 2010? 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. Cars- Cash for Clunkers - Car tax credit when you trade your old fuel inefficient car for a new one and get a rebate of $3500 or $4500. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

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2009 Cash for Clunkers bill

updated: Aug 2009 CARS stands for Car Allowance Rebate System. CARS or Cash for Clunkers is a program introduced by the Obama government to encourage people to buy fuel efficient cars. If you are planning to buy a new car, you could trade your old car and get a rebate or discount voucher of $3500 or $4500 depending on criterion which are explained below.
Yes, its possible to get $4500 rebate even if your old car is absolutely a junk car!. In fact the more junk (fuel inefficient) it is, the better your chances of qualifying for $4500 instead of $3500 rebate. Cash for Clunkers program can be used in addition to Auto Stimulus in Obama's stimulus package and also in addition to the Hybrid Car Tax Credit if applicable. The word Clunkers is used for Old fuel inefficient cars or junk cars and the precise definition is given below. Read the three eligibility criterion and 5 frequently asked questions given below in order to understand the benefits and details of cash for clunkers program.

Cash for Clunkers Details: Are you eligible?

In order to be eligible to get the $3500 or $4500 discount in Cash for Clunkers program the following must be applicable to you.

1. Eligibility requirement for your Old Car : Your Old junk Car (or Clunker) must be made in the last 25 years (or after 1984 to be precise). The trade in car must not have a fuel economy rate or mileage of more than 18 mpg (miles per gallon).
2. Eligibility requirement for New Car : The New Car must have a price tag of at most $45,000. If the new car being purchased is more than this value, you are not eligible for the Cash for Clunkers program. Also the new car being purchased must have a fuel economy rating of at least 22 mpg (miles per gallon).
   
3. $3500 or $4500 cash rebate for clunkers ? : If both the above criterion are satisfied you will get a $3500 rebate as a cash discount for your clunkers or Old trade in Car. In the situation if the new car being purchased has a fuel economy rating of more than 10 mpg than your old car, you will be eligible for $4500 rebate for your junk car or clunkers.

Five additional FAQ on US Cash Clunkers 2009

1. Where can you find fuel ratings of your old and New car? Go to fueleconomy.gov.
2. Till when is this program valid? The Cash for Clunkers program is supposed to run from July 1 to November 1 2009. But the Government alloted $1 billion for the Cash for Clunkers program. This program may end sooner once this money is exhausted (unless the Congress decides to extend the program). $1 billion is good for 250,000 vouchers. i.e. in order to benefit from trading your clunkers you must be one of the first 250,000 people. update: The Senate has announced a further $2 billion extension of Cash for clunkers Program. Read more about Cash For Clunkers Extension. Note that Cash for Clunkers has already generated $920 million in junk car rebates and 220,000 in Auto Sales. This indicates that the new funds are likely to last at least through September 2009 or more.
   
3. Are there any income limits to qualify for Cash for clunkers program? There do not seem to be any income limits to be eligible for this program. You can find more information on cars.gov.
4. Is the discount voucher of $3500 or $4500 in addition to the trading price of your old car? Note that your Old car will be destroyed. So you will not get any value for your old Clunkers in addition to the discount voucher you get as per Cash for Clunkers Program. However some dealers may compensate you for the scrap metal generated from your car.
5. Where can you find more info about Cash for Clunkers? Cars.gov

My Opinion on Cash Clunkers Incentive or Junk Car Rebate

In my opinion, the Cash for Clunkers program 2009 is a great idea which is poorly executed. This idea of rebate for junk car would have been more effective if the eligibility or qualification criterion for the new car would have been stricter, say for example only new cars with mileage of over 30 mpg are eligible (example hybrid cars like Toyota Prius). However from the car buyers point of view, this is a great opportunity. How many times do you get a $4500 rebate for your junk car? Please take a moment to share your thoughts and ideas in a comment.

Federal Tax Breaks, IRS Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. Cars- Cash for Clunkers - Car tax credit when you trade your old fuel inefficient junk car for a new automobile and get a cash rebate of $3500 or $4500. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

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Solar Energy Tax Credit

If you are located in the United States, you could qualify for a whopping 30% solar energy tax credit for installing solar panels and solar water heaters. Solar energy which is a renewable source of energy can also significantly reduce your electricity and energy bills and thus contribute to an additional savings. Apart from this, since solar energy is environment friendly, you will also be helping our planet to stay green and healthy. This Solar Energy Tax Credit is part of the Economic Stimulus Package passed by the Obama Government in 2009. Read this entire article to find out how you can benefit from these Federal Government Incentives for Solar Energy.

How much money can you save by using Solar energy?

Even without the tax credits offered by the Government for Solar energy, installing a Solar Water Heater or Solar Panels can actually translate into monthly savings on your energy bills. Below there is a discussion on economics of solar water heater. If you would like to install solar panels please read the wikipedia article on Photovoltaic module or leave a comment and I will try to answer.

Solar Water Heater Economics

A typical Solar water heater costs around $2000 to $4000. On an average this heater will use solar energy and help you save around 50% to 80% of your water heating bills. An average American family spends around $1400 on energy bills per year. Around 30% of this is typically for water heating. Which means around $420. Thus by installing a solar water heater you can save anywhere between $200 to $350 per year. And the best part is that recent Government renewable energy incentives provide a solar energy tax credit of 30% of that above cost. Which means a solar water heater which would have cost you around $2000 to $4000 will only cost you $1400 to $2800. Thus we are looking at over an annual savings of $200 to $350 for a one time cost of installing a solar energy unit for heating water. In my opinion this makes perfect economic sense. Moreover this calculation does not include the fact that cost of energy keeps on rising while the annual maintenance cost of a Solar Water Heater will remain more or less constant and negligible.

Solar Energy Tax Credit Details

Here are the main highlights of the Government Incentives for using Solar Energy.

1. Amount of Solar Tax Credit: You will be eligible for a tax credit of 30% of the amount you spend on installing a Solar water heater or Solar Panels (Photovoltaic Systems) provided it meets the guidelines given below. There is no maximum amount or cap for this tax credit. You get a tax credit of 30% of any qualified spending on solar energy units.
   
2. Solar Water Heater Requirements: Not any system you install will be eligible for this tax credit. Your Solar water heater must meet the following minimum guidelines in order to qualify for the incentives. All ENERGY STAR solar water heaters qualify for the tax credit.

   At least half of the energy generated by the “qualifying property” must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household.

   The credit is not available for expenses for swimming pools or hot tubs.

   The water must be used in the dwelling.

   The system must be certified by the Solar Rating and Certification Corporation (SRCC).

3. Photovoltaic System (or Solar Panels) requirements: This must meet the following basic requirements:

   Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.

4. Dates of Purchase or Installment: Your Solar water heater or Photo voltaic System or Solar Panels must be installed or placed in service after February 17 2009 and before December 31 2016.
5. Income Caps or Limits : There are no income Caps to qualify for the solar energy tax credit. No matter what your income, you are eligible for this tax credit of 30% of all qualified spending on solar units.
6. Non-Refundable Tax Credit: This is a non refundable tax credit. Which means you will not get a tax refund if the amount of taxes you owe to the IRS are less than your Solar energy tax credit.
   

Other Tax Breaks, Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

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Cobra stands for Consolidated Omnibus Budget Reconciliation Act of 1985. Among other things, COBRA gives the opportunity for some employees the opportunity to continue their health insurance coverage even after leaving their employment.

Global recession of 2008 and 2009 has led to many job losses. As a result of which only 10% of the Americans eligible for Cobra could afford to pay the full health insurance premium mainly because of their job loss.

In order to help layoff employees, as part of 2009 stimulus package the Obama government has decided to help by reduction of Cobra Health Insurance payment by 65% for 9 months.

Who qualifies for the Cobra Health Insurance Stimulus?

1. Anyone who lost or loses her/his job (layoff victim) between September 1 2008 and Dec 31 2009 may qualify for the 65% premium reduction of Cobra Health Insurance Payment for 9 month. So if you qualify, you will only have to pay 35% of Cobra premium to your former employee.
   
2. In order to qualify you must have worked for an employer who is required to offer Cobra Health Insurance coverage extension. If you did not enroll in COBRA because it was too expensive or you could not afford it, you still have 60 days ( from Feb 17 2009, i.e. till April 17th 2009) to elect for Cobra and receive the 65% premium reduction subsidy.
   
3. Income Limits / Income Caps: In order to qualify for Cobra Stimulus your modified gross annual income must be less than $150,000 for individual tax payers and $250,000 for married tax payers.
4. You are not eligible for the Cobra stimulus if you are eligible for other group health coverage or Medicare.
   

If you are eligible for Cobra stimulus package but have been paying the entire insurance premium yourself, you are eligible for reimbursement of 65% of your Cobra insurance premium dating back to Sep. 30 2008.

Other Tax Breaks, Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

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Did you pay someone to take care of your child spouse or dependent ? If you did then you can take benefit of IRS Child Care tax credit and claim tax deduction for the amount you paid to take care of your child spouse or dependent. Here are the things you need to know in order to claim the Child/Dependent Tax Credit.

Qualifying Dependent for the Dependent Care tax Credit:

The dependent for whose care you paid and are claiming the dependent tax credit for must qualify in the following sense.
1. The Dependent must be a dependent child under the age of 13 years. OR
2. Your Spouse or other dependents who are physically or mentally incapable of taking care of your themselves may qualify for dependent care tax credit.

Your and Your Spouse's Income- qualifying for Dependent Care Tax Credit
- The Care must be provided so that you (or you and your spouse if you are married and your spouse is not the dependent in question) can work or look for work during that period. So in particular, if you are married and your spouse is at home by choice, then probably you do not qualify for the dependent care tax credit.

-You must have earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment. If you are married then both you and your spouse must have earned income from the above mentioned sources. One spouse may be considered as having earned income if they were a full-time student or they were physically or mentally unable to care for themselves.

Who can qualify as a Care provider for Dependent Care Tax Credit?
The Care Provider must be identified on your Tax return. The Care provider cannot be one of the following:
- Your Spouse - you cannot simply say you have paid your spouse in order to take care of your dependent and claim the dependent care tax credit.
- You Child who is under age 19 years of age - You cannot claim the Dependent Care Tax credit by saying you paid your child who is below 19 years of age in order to take care of your dependent. This applies even if your child is not dependent on you. From the IRS website, it appears that if you have a child who is over 19 years of age and not dependent on you, then he may qualify as a care provider for your dependent.

Read more on IRS Tax Tip for Dependent Care tax credit.

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This post contains a summary of the 2009 Obama's small business plan. Obama has alloted $15 billion to revive small businesses and help the U.S. economy. If you are looking for latest news or confirmed update on this plan, note that the precise details of this plan are not out yet and they could be available as early as by the end of this month. You may wish to bookmark this page and visit again for updates on 2009 Obama's small business plan.

Now lets look at what is expected of this $15 billion small business stimulus. Scroll down for latest on IRS tax breaks for small businesses.

Anyone who had followed the 2008 presidential debates between Barack Obama and John McCain would have noticed the rhetoric regarding 'Joe the Plumber' which had was a small reflection of what Obama was planning to do for small businesses in the United States. There are over 25 million small businesses in America and over 99% of all employees are small business employees. Given this and the current recession or economic downturn, any reasonable 'recovery policy' must take into account small businesses and try to boost them by giving tax cuts, tax breaks, refunds, rebates or other stimulus.

Here are the highlights of 2009 Small Business Plan (announced earlier) of Barack Obama and Joe Biden:

Obama Small Business Health Tax Credit: This is a tax credit provided to small businesses to reduce healthcare costs of employees. Under this new 2009 tax credit, all small businesses will be provided a refundable tax credit of 50% of the premiums paid by small businesses on behalf of the employees.

Zero Capital Gains and Other Tax Relief for Small Businesses and Start Ups: Capital Gains taxes on small and start up businesses will be eliminated. This proposed small business tax break is expected to reduce tax burden on businesses.

Expand Loan programs for Small Businesses: In order to increase small businesss line of credit Obama administration will work to help more small business entrepreneurs get loans, expand the network of lenders, and simplify the loan approval process.

Apart from the basic small business stimulus mentioned above there are a number of other points proposed earlier by Obama to revive small businesses in 2009. You may read more details of their small business vision on Barack Obama and Joe Biden's plan for Small Businesses.

The IRS has also announced series of significant new tax breaks for small businesses.

• Small businesses with average earnings upto $15 million (qualifying limit) in gross receipts annually over a three-year period will be allowed to claim losses for the past five years in the current tax year. This limit prevents larger business' from claiming this tax exemption. It also means many firms should get refunds now, rather than have to wait to deduct 2008 losses from future profits after the economy recovers. But firms must decide whether to use the five-year carry back provision and which year it applies to by April 17.
• Small businesses may write off upto $250,000 in investments this year.
• Small businesses can reduce estimated tax payments to 90 percent of the previous year's filing.
• Small businesses will be allowed to take larger depreciation deductions within the first year of property purchases.
• For those who invest in small businesses, 75% of capital gains will be excluded.

I will update the info and also provide authentic links soon.

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The amount of Standard deduction changes every year due to adjustments for inflation. The amount for 2008 according to IRS website are:

IRS 2008 Standard deduction for Single Taxpayer: $5,450
IRS 2008 Standard deduction for Married filing jointly: $10,900
IRS 2008 Standard deduction for Head of Household: $8,000
IRS 2008 Standard deduction for Married filing separately: $5,450

The precise amount of standard deduction you can claim also depends on a variety of other factors. If any of the following apply to you, please use the Standard Deduction Worksheet in the Form 1040EZ, 1040A or 1040 instructions.

1. You are over 65 years of age.
2. You are blind.
   
3. You plan to claim additional standard deduction for state and local taxes.
4. A tax exemption can be claimed for you by another taxpayer.
5. You have a net disaster loss from a federally declared disaster.

Some additional points to be kept in mind.

1. If you are married but filing separately and your spouse itemizes deductions, you cannot claim a standard deduction. You have to itemize deductions too.
2. Non-resident Aliens, dual-status aliens and individuals who file returns for periods of less than 12 months are not eligible for standard deductions.

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The 2009 Obama's Economic Stimulus Package contains several tax credits, tax rebates, tax refunds and stimulus payments like the 2009 $8000 Housing Stimulus bill, 2009 $800 Making work pay tax credit (as a replacement for 2009 Stimulus Checks) and the 2009 Auto Stimulus bill in the form of tax deduction for sales tax and auto loan interest. Apart from these most of the other people will get a piece of the stimulus package pie in the form of a one time $250 Social Security payment. Here are the key points about this $250 Social Security stimulus payments which are to be sent out in May 2009.

Who is eligible for $250 Social Security Stimulus Paycheck? How does it work?

Anyone who is entitled to Supplemental Security Income (SSI) or to any of the Social Security benefits at any time during Nov 2008 to Jan 2009

1. Retirement Social Security benefits.
2. Wifes or Husband's Social Security benefits.
3. Disabled Adult Child benefits (but not other child's benefits).
4. Widow's, Widower's, Mothers, Fathers, Parents Social Security Benefits.
5. Disability Insurance benefit.
6. Special age 72 benefits.

is eligible to recieve 250 USD Social Security Stimulus Payment check. Children qualify for the 250 Social Security payment only if they are getting disabled adult child benefit.

How to get the $250 Social Security Check? - Those who are eligible for the $250 Social Security Stimulus Payment will recieve the payment automatically by late May 2009. No action is needed on your part. However if you do not get your 250 social security check by May 2009 end you may contact SSA (not IRS) directly.

To receive payment, the beneficiary's address of record must be in a valid US state or territory. Only individuals eligible for Social Security, SSI, Veterans, or Railroad Retirement benefits at any time during the months of November 2008, December 2008, or January 2009 may be eligible for the one-time payment. The $250 SS payment will be delivered in the same way your current Social Security or SSI benefit is sent.

Other Tax Breaks, Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

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If you are planning to buy a home in 2009 you can take advantage of the Housing stimulus bill which is a part of 2009 Obama's Economic Stimulus Package. This Housing Stimulus bill contains a $8000 refundable tax credit for First time home buyers. One of the main points to understand here is What is the defintiion of a First time Home Buyer? This post is in response to the 100+ comments i recieved on my earlier post on $8000 first time home buyer tax credit - details explained in which most of the comments were a result of a confusion - Do i qualify for this home buyer tax credit? Here are the key points.

1. Definition of a First Time Home Buyer: A first time home buyer is one who has not purchased or owned a Principal residence in the past three years. A principal residence is home which you actually live in. It maybe a mobile home a condominium (or condo) or a house boat. As long as you have been residing in it, it is your principal residence. Thus if you have purchased or owned a house in the past but have rented it, then that was not your principal residence. You may still qualify for the $8000 first time home buyer stimulus. Rental property or Vacation homes do not disqualify you from claiming the 8000 home buyer tax credit. Even non Resident Aliens may qualify for this $8000 housing tax credit. However not that if you are married, then both you and your spouse must be first time home buyers. Read my posts on $8000 first time home buyer tax credit for married people and $8000 housing tax credit for joint purchases.
   
2. Dates of Purchase: in order to qualify for the $8000 first time home buyer tax credit you must purchase your home between Jan 1 2009 and Dec 1 2009.
   
3. Income Limits/ Income Caps: Not every who is a first time home buyer qualifies for the $8000 housing stimulus. Only first time home buyers with modified gross annual income of $75,000 get full benefit of this housing tax credit. The tax credit is gradually reduced for those with income between $75,000 to $95,000 and finally a home buyer gets no tax credit if his/her modified gross annual income is more than $95,000. For married taxpayers, the home buyer tax credit is gradually reduced to zero for modified gross annual income between $150,000 to $170,000.
4. Building a house as opposed to buying a house: Yes, even if you are building a home on a land you qualify for the $8000 home buyer tax credit. The law treats this case as if you have purchased the home from the contractor.
   

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Obama unveiled a Economic Stimulus Package in order to revive the economy. One of the key provisions in 2009 Obama Economic Stimulus plan is the housing stimulus bill. This housing stimulus, also referred to as $8000 first time home buyer tax credit is a refundable tax credit given to qualifying first time home buyers who purchase homes between January 1 2009 and December 1 2009. Read my detailed post on 8000 housing tax credit- details explained for a gentle introduction to this housing tax rebate. I am writing this post in response to the 100+ comments i recieved for on the above mentioned post on federal 8000 home credit, especially to clarify some of the points for First time home buyers who planning to make a joint purchase. Here are the key points.

1. In order to qualify for the $8000 first time home buyer tax credit or housing tax credit you must be a first time home buyer. The defintiion of first time home buyer is one who has not owned a Principal Residence in the past three years. Principal residence is a home in which you actually stay in. Thus if you have owned a home and have rented it for the past three years or more, or it was your vaction home, then you still may qualify for the $8000 first time home buyer tax credit.
2. If you are married, then both you and your spouse must be first time home buyers. This is irrespective of whether you are planning a joint purchase with your spouse or not. Read more about $8000 first time home buyer tax credit for married people to learn more if you are married or are planning to get married in 2009.
3. If you are unmarried and making a joint purchase, then it is ok if one of the partners or home buyers qualifies for the 8000 housing tax credit. In this case, after making the joint purchase the 8000 home buyer tax credit may be allocated to any one (but not more than one) of the qualifying first time home buyer involved in the joint purchase.
   

Please read my main post on $8000 home buyer tax credit or housing stimulus for more details

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Obama unveiled a Economic Stimulus Package in order to revive the economy. One of the key provisions in 2009 Obama Economic Stimulus plan is the housing stimulus bill. This housing stimulus, also referred to as $8000 first time home buyer tax credit is a refundable tax credit given to qualifying first time home buyers who purchase homes between January 1 2009 and December 1 2009. Read my detailed post on 8000 housing tax credit- details explained for a gentle introduction to this housing tax rebate. I am writing this post in response to the 100+ comments i recieved for on the above mentioned post on federal 8000 home credit, especially to clarify some of the points for First time home buyers who are married or are planning to marry in 2009 and also purchase a home. Here are the key points.

1. If you are married, in order to qualify for the $8000 first time home buyer tax credit, both you and your spouse must be first time home buyers. A first time home buyer is one who has not owned a principal residence in the past three years. Thus if your husband/wife owned a house in the recent past and that house was a principal residence, (which means it was not rental property or vacation home) then unfortunately you do not qualify for the 8000 home credit.
2. If you are planning to marry in 2009 and also planning to buy a house in 2009 then it may matter in which order you do this. For the purpose of qualifying for this $8000 home buyer tax credit only your martial status on the date of purchase matters. Note that is your fiance/fiancee is not a first time home buyer and you are, then it is better that you buy a house first, claim the $8000 home buyer tax rebate and then get married.
   

Please read my main post on $8000 home buyer tax credit or housing stimulus for more details. For unmarried joint purchases read my post on $8000 home buyer tax credit for unmarried joint purchases.

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2009 Obama Economic Stimulus Package- IRS Tax rebates

The Obama Government has unveiled several tax credits, tax breaks and tax deductions in order to lift the consumer mood and boost the U.S. Economy. The following are some of the key tax breaks in the Obama Economic Stimulus Plan.

1. 2009 Housing Stimulus Bill: All qualified first time home buyers will be eligible to get a tax credit of $8000 for any a house purchased between Jan 1 2009 to Dec 1 2009. For details like income limits or definition of first time home buyer, etc. of this $8000 first time home buyer tax credit read my post of 2009 Housing Stimulus details explained.
2. 2009 Auto Stimulus: For all new vehicles/cars below a price of $49,500 between Feb 17 2009 to Dec 31 2009, there will be a special auto stimulus tax deduction under which sales tax and local state taxes like excite tax as well as interest on the auto loan will be eligible for tax deduction when you file your 2009 Federal Tax return. Read my post on 2009 Auto Stimulus for New Car purchases- details explained.
3. Cash for Clunkers : A stimulus or incentive program which offers you $3500 or $4500 for your qualifying old car when you purchase a new car. Thinking of buying a car? Don't miss my posts on Auto Stimulus mentioned above and Cash for Clunkers. Note that this is not the part of the Obama's economic stimulus package but was passed later.
   
4. Substitute for Stimulus Checks 2009- Making work Pay tax credit: Instead of Stimulus payments in 2009, the Obama economic stimulus package contains tax credits of $400 for qualifying individual tax payers and $800 for married couples. Read my post on Making work pay tax credit stimulus details explained.
5. 2009 Recovery Rebate Tax Credit: Those who did not recieve stimulus paychecks in 2008, may be eligible to receive a IRS stimulus payment called Recovery Rebate Tax credit. Read my post on 2009 Stimulus Checks.
6. $250 Social Security payment check in 2009 - Stimulus checks for everyone who is eligible to receive SSI and social security benefits during Nov 2008 and Jan 2009. Read my post on 250 Social Security Stimulus in 2009.
7. Other Tax Credits / Stimuli : There are still some additions to the above list. For example the Solar Tax Credit (this is not the part of Obama's economic stimulus package, but still an economic incentive).
   

A question that naturally comes to ones mind is the Obama Stimulus Package which totals to a whopping $789 billion actually improve the economic situation? Although no magical effects can be expected from the above stimulus plan and tax rebates- such stimulus are indeed required to giving a help hand to the otherwise struggling U.S. economy.

In case of any further questions on the above mentioned Federal tax credits and tax refunds contained in the 2009 Obama Stimulus Package, you may refer to the IRS website or ask a comment.

Federal Tax Breaks, IRS Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you Cash for Clunkers - Is it Useful? Will there be a Second Stimulus Plan in 2009 or 2010? 2009 Obama Stimulus Package details explained. New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles. Cars- Cash for Clunkers - Car tax credit when you trade your old fuel inefficient car for a new one and get a rebate of $3500 or $4500. $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama. $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers). $250 Social Security Stimulus Check in 2009 Economic Stimulus Package. 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals. 2009 Stimulus Checks? Economic Stimulus Payment $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

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