Details of Obama’s Recovery Tax Plan
New president Barack Obama is hard at work on the American Recovery and Reinvestment Act. This is the first major bill of 2009. This bill includes many of the tax breaks that president Obama talked about on the campaign trail and during many debates. Of course, this bill contains more than tax breaks. It is also pushing for roughly $550 billion in spending. It is important for taxpayers to be aware of both the pros and cons of this legislation.
Are you more worried about how this legislation will effect your tax situation? If so, here are a few changes that will come about if the bill is passed as it currently stands:
1. Making Work Pay Tax Credit: a $500 tax credit to offset FICA taxes on the first 6.2 percent of income.
2. American Opportunity Tax Credit: a provision that will expand the current setup of the Hope education tax credit.
3. Changes to the First Time Homebuyer Tax Credit: as it stands a tax credit of $7,500 is available to first time homebuyers as long as it is repaid. This bill hopes to eliminate the repayment portion.
4. Refundable Child Tax Credit: hopes to make this tax credit refundable for 2009 and 2010.
5. Increase tax credit amount for energy efficiency to 30 percent.
Will any of these changes work in your favor? While these are five of the most talked about details of the American Recovery and Reinvestment Act, they are not the only ones. Keep an eye out for changes and modifications to this legislation over the next few days. As a taxpayer you want to know exactly what is going on at all times.
