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Wednesday, March 18

The Stimulus for Dummies – or how the little guy makes out!

Federal stimulus has tax credits for the little guy, gal
Taking a cut
Wednesday, March 18, 2009
By Bill Toland, Pittsburgh Post-Gazette

As tax season heads into its home stretch, here's what is -- or could be -- coming your way:
• You should be getting a tax credit in your paychecks, starting April 1 at the latest. It's called the Making Work Pay Credit, and it provides up to $400 per person or $800 for couples filing jointly. If you make less than $75,000 (or less than $150,000 per couple filing jointly) you should get the full credit, an extra $10 or $20 in your pay each week. Eligible retirees and seniors can get a one-time $250 payment (in late May, probably).

WOW! That extra $10 a week in any family’s only working paycheck will probably mean the difference between life or death…or whether it will go toward the 9 to 14% increase on prices at Wal-Mart this year or even higher percentages at other stores! And the really swell part of this good news is that it looks like that extra money will be taxable income!

• First-time home buyers get the biggest bonus of all, up to $8,000 in "free money," Mr. Williams said. The new home buyer's credit replaces the old one -- which was $7,500, and had to be repaid over time -- with one that doesn't have to be repaid as long as the buyer stays in the home for three or more years. The catch? You have to make less than $75,000 (or $150,000 for a couple) to receive the full credit, you mustn't have owned a home in the last three years and the home must be purchased between Jan. 1 and Dec. 1, 2009.

Well, for those of us who were stupid enough to buy a house when we were younger, say, during Carter or Ronnie’s regime, instead of waiting for these bad times and are paying it off now or have it paid off, that really helps us…how?

• If that same home needs new appliances and windows, you're in luck. The costs associated with energy efficiency upgrades in your primary residence -- a new water heater, furnace or new windows, for example -- are tax deductible, with a maximum credit of $1,500. That's not just for first-time home buyers, either.

HooBoy , Natasha! A new water heater is around $400! Just about takes care of that taxable $520 this wonderful stimulus package is handing me to forget about AIG. (The windows and furnace will have to wait until 2010 and 2011!)

• Seniors looking into a "reverse mortgage" will find that the limits on these loans have been increased by 50 percent through 2009.

Reverse Mortgage Calculator

What a bonanza for seniors! Reverse mortgages sound really swell or downright nasty depending on who you listen to. Go to the above site for more information on reverse mortgages (after all, your tax dollars are paying for it) and use the calculator they have set up. Then try to go to sleep tonight.

If you happen to be just 62 and have a home worth $100,000, you might get about $45,000 provided you don’t owe back taxes and don’t need major repairs to your home (see the bullshit above so you can pay for those repairs!). But if you’re 72 and your house is just peachy fine, you could get $52,000 and the really lucky 80 year olds might get $63,000! Sounds wonderful. The catch? That’s the maximum you can get! Piss off a banker or look like you need the money and you’ll probably get less. It’s really up to them! Ain’t that so cool? Oh, you have to pay interest on it if you get it whether you use it or not. You have to pay it back if you move. You have to pay it back if you sell the house. But the good news is if you die, your kids get to pay it back! I can hardly wait! That’ll teach those ingrates for not eating all their Brussels Sprouts when they were kids!

• In the market for a new car? The American Recovery and Reinvestment Act of 2009 included a tax credit that could save you a few hundred dollars. The deduction applies to the first $49,500 of the vehicle's sale price, and applies to only new cars. The credit applies to new cars purchased through the end of this year. As with most of these credits, you won't see the car credit right away, but when you file your federal tax return in 2010.

Of course, since many have lost a lot of retirement money and pensions, that new car just might not get bought. So, when you see the 20 and 30 somethings in their shiny new, bright green pleasure machines, remember you helped them afford it. Just give the Pinto another year or two.

• The stimulus plan also helps if you have children in college. The Hope scholarship tax credit, which was worth a maximum of $1,800 during freshman and sophomore years, has been replaced with a new credit worth up to $2,500 this year and next. Better yet, it's good for students in their junior or senior years, so even if you thought you maxed out on your Hope credit during your child's first two years of college, this credit might still be available to you. Also, the government is raising the maximum on the Pell Grant, to $5,350 in the 2009-10 school year, and $5,500 the year after.

In case you were again foolish and had kids early, got big loans to put them through school and are paying them off right now, you’re actually shit out of luck. Of course, you could always go back to school yourself, provided you can juggle at least one job, get there in that old clunker you have, and not worry about rain coming in through windows older than you are or a roof that leaks like Strom Thurman’s bladder. So basically, this one’s no good for most of us either.

• If you've recently lost your job, you'll notice several small tweaks to unemployment benefits. First, the first $2,400 in unemployment benefits received this year are now exempt from federal taxation, which translates into a few hundred extra dollars. Those same benefits will be increased by $25 a week, and you can receive them for a longer period, thanks to an extension in the benefits period.

Let’s see… you lost your job and have little income because we all know unemployment makes us wealthy. And since you can’t afford to buy that new water heater (since you have no bread), and have no job, the extra taxable $10 a week you won’t be getting ain’t gonna help, ‘cause you ain’t getting it! You already have a house or are paying it off, if you can find the money, and the property taxes and school taxes aren’t going down so the option of going back to school may not be an easy one. You went to school when? Can you find your transcripts? Do you remember how to read and write? Is your school still around? It’ll be tougher than you think getting into school while paying for the taxes, mortgage, repairs to the house and that old car just may outlast you. Yep! That stimulus really is helping…someone.

You'll also get a break on health insurance via a 65 percent federal subsidy on benefits secured through the COBRA program. COBRA (Consolidated Omnibus Budget Reconciliation Act) allows workers to keep the same health coverage they had when they were employed.

Finally a break! A subsidy on insurance you already can’t afford since you lost your job, can’t take advantage of house repairs because you aren’t getting the $10 a week windfall from the job some foreigner took. And most colleges now require some kind of insurance when you attend so screw that!

So looking at it from a practical standpoint, to get anything from this stimulus if you’re a little guy or gal:

If you still have a job but only one works in the family, you get an extra $10.00 a week that will be taxable income. And that boils down to about $6.00 clear per week or $350 a year. Bye bye water heater.
If you just bought a home because you have a job that gives you that extra $10.00 per week (and you’re under 50 and are lucky if your spouse works too…you just doubled your bonus!), you get a nice tax break. And you can buy that espresso machine you and your honey so desire and get a tax write off on it, too! (I wonder if marital aids are considered appliances?)

Now that you have that extra $20 per week, go out and buy that new ‘vette! But make sure you get the one that’s just under the $50,000 limit so you can take advantage of the tax break.

While you’re at it, why not enroll in a college for that long wanted MBA and get the extra Pell Money and credit? Oh, you don’t have a good car, can’t afford the tuition, books or meals, are paying taxes and have no job. Sorry ‘bout that, chief!

But if you lose your job, not to worry! You get extra cash a little while longer so you can get all those wonderful things in the stimulus package. A little circular logic here?

You're eligible for the subsidy if you lost your job after Sept. 1, 2008, or lose it this year.

Oops! If you’re already unemployed too fucking bad, isn’t it?

The best bet however is to get a reverse mortgage, provided your home is in great shape and paid off and don’t need new appliances or repairs, etc., etc. Then you might get about 40% of the value of your home…at a rate, of course. If you’re 62, it may not be worth it; 72…bigger bucks, wow! But the best way to beat this stimulus is to get that reverse mortgage by kissing some banker’s ass, be in your 80s with a paid off house; paid up taxes; no repairs needed to the house; have a decent car; work as a Wal-Mart greeter for minimum wage to get that extra $10 per week; be on Medicare and Medicaid and Social Security and go to night school to get your degree in neurosurgery!

Or just get the reverse mortgage (at at least 80), give it to anyone you want..then die. That’ll teach those assholes in Washington!

Yes sir! That’s change this dummy can believe in.

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