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I keep hearing from clients that the stimulus package sounds great in concept, but what is in it for them? All of the media attention is focused on bailing out the banks and big business, and I would have to agree that the news is dwelling on rescuing Wall Street and the like. But that being said, the stimulus plan does offer individuals and small businesses more tax credits, reductions and incentives than any that I can remember in my lifetime.

Consider that in the package are tax credits for education, health care, housing and more. There is extended aid for the unemployed and generous concessions for retirees. The plan also includes job programs, debt relief programs, tax reductions and massive sums to fund higher education, infrastructure, health care and energy conservation on a state level.

Let’s take a look at some of the highlights that you may have missed:

Home Ownership: If you are a first time homebuyer, or haven’t purchased one over the past three years, then you are entitled to up to an $8000 tax credit. This will hopefully make home ownership more affordable for those who thought the cost was out of reach. If you already own a home and improve energy efficiency, you can earn up to $1500 in tax credits in both 2009 and 2010. This includes replacing windows and insulation, buying energy efficient appliances and converting to energy efficient heating.

Car Purchases:  Buy a new car by December 31, 2009 and you can earn a deduction for state and local sales taxes. There are additional tax credits if you purchase a hybrid.

Health Care: If you lost your job after September, September, 2008 (through Jan. 2010) you will get nine months to keep your health insurance going by paying for only 35% of the Cobra premiums (the employer pays the balance and earns a tax credit for covering the 65% balance).

Small Business breaks:  Small business owners may be entitled to added deductions for the purchase of new equipment, to retroactively offset losses against prior profits over the last three years, and possibly to gain tax credits for hiring new employees.

Retirees: There will be a one-time payment to the fifty -five million SSI beneficiaries (Supplemental Security Income)which amounts to $250 for individuals and $500 for couples (provided they both currently receive benefits). Older veterans and railroad retirees will receive one-time payments as well. The money will be disbursed in June and nothing is required in terms of special filing. The extra amount will be added to benefit checks.

These are just some of the items included in the stimulus plan and it makes me cautiously optimistic. To date, individual taxpayers and small business owners didn’t have a TARP program to help them get back on their feet like big business and the banks. Ironically, however, there are some who concerned that infusing this much capital into the economy will be so effective, it could set off an inflationary period. We should be so lucky.

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Tags: bank bailout, debt relief, home ownership, job programs, lee rosenberg, obama stimulus plan, recession, retirees, small business breaks, stimulus package, tarp plan, tax credits, taxpayers, wall street

About the Author: Lee Rosenberg is the Co-founder of ARS Financial Services, Inc. As a Certified Financial Planner with more than 34 years of solid financial expertise. Lee is a registered representative of Cadaret, Grant & Co., Inc. He was also named one of the top 25 Independent Financial Advisers in the US by Rep magazine.

This entry was posted on Monday, March 23rd, 2009 at 9:39 am and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.