What You Need to Know About the Stimulus

The stimulus plan signed into law on February 17 includes several tax breaks that can put more money in your pocket (visit IRS.gov for more information).

Extra take-home pay. Most workers will receive an extra $400 (or $800 for married couples) in both 2009 and 2010. Instead of receiving a check, employers will adjust their tax withholding so you’ll get a little extra money with each paycheck. The credit starts to phase out for single filers with adjusted gross incomes of $75,000 or more, or $150,000 or more for couples.

A tax break on new cars. Most people who buy a new car after February 16, 2009, can deduct the state and local sales taxes paid on up to $49,500 of the car’s cost.

Help for home buyers. You could get a tax credit of up to $8,000 if you buy a first home from January 1 to November 30, 2009.

A break on tuition. The American Opportunity credit can shave up to $2,500 per year off your tax bill for college costs paid in 2009 and 2010.