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The American Recovery and Reinvestment Act of 2009 was signed into law on February 17th.   The act includes a obamasignsnumber of different spending programs, with money going to infrastructure, healthcare, education, and energy to help stimulate and recover the economy -  but a  whopping $288 billion of the $787 billion dollar package  is in the form of tax credits, deductions, and cuts.  As a nation, we’re all interested in how the act will start to recover our current economy and improve the future outlook – and we can keep an eye on how the money is spent on a website designed to show us just that.  Recovery.gov was set up to give transparency to the Recovery Act – and allows individuals to share how the act is helping them (or not).  Knowing where the money goes is great, but we’re also wondering how it will trickle down to individuals.  Here are some of the ways you might benefit from The American recover and Reinvestment Act of 2009:

Tax Credits - Individuals making less than $75,000 a year receive a $400 tax credit and married couples making under $150,000 receive an $800 tax credit.  This isn’t a situation where you’ll receive a check in the mail, instead you’ll pay that much less in taxes over the course of the year and probably see a slight increase in the amount you take home in your pay each payday.)

First Time Home Buyer Credit - Previously, there was a tax credit that allowed new home buyers to receive a tax credit that would be paid back over the first few years after owning the home.  Included in the ARRA is an $8000 first time home buyer credit,  where if you’re a first time home buyer in 2009 (making less than $75,000 a year or $150,000 for married couples), you will apply the $8000 to your tax bill at the beginning of 2010.  Since most people pay their taxes throughout the year through their paychecks or self employment filings, you’ll get the home buyer credit in the form of a big, fat, $8000 refund check.

Other credits, deductions or cuts that an individual (or family) might benefit from include:

  • Increase in the Alternative Minimum Tax Limit
  • College Tax Credit
  • Increased Earned Income Tax Credit
  • Vehicle Tax Credit

Most of the benefits are for individuals earning less than $75,000 per year (or married couples earning under $150,000) so if your income is right around those marks you’ll still receive some of the benefits but should expect to receive a little less than the stated amounts.  The benefits decrease the more money you earn.  You can find out more specifics regarding the American Recovery and Reinvestment Act of 2009 at FineTunedFinances.com.



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