Feeling Better?

Any day, recovery is coming your way

by Sandra Olivetti Martin, Bay Weekly editor

Are you feeling better yet? You should be — any day now.

The day we swallowed the bitter pill of the American Recovery and Reinvestment Act’s $787 billion prescription — and its bitterer consequence of trillions in debt — its medicine went to work. It will continue working over the next two years.

You’ll feel it in your paycheck — if you’re still getting one.

Downsized, laid off or redundated? A raise in your unemployment check will ease a bit of the pain, as will a longer lease on unemployment benefits.

Even April 15 won’t hurt so much, because you’re likely to pay less tax in 2009 and 2010 — with next year’s savings calculated on this year’s taxes.

Here’s how — and when — we’ll get stimulated.

Get a Job

Starting April 1 (no fooling), you’ll see more money in your paycheck. President Barack Obama’s favorite Stimulus program, neatly named Making Work Pay, is supposed to mean money in the bank for 95 percent of us this year and next.

Recovery rebates will equal 6.2 percent of your earned income, if you fall in the income targets. Each child is worth another $300. But the rebate decreases as income rises: The ceiling is $99,000 (adjusted gross income) for a single parent with two children; $186,000 for a couple with two children.

Lose Your Job … and Save on Taxes

Under the Stimulus, your unemployment check goes up by $25 per week. Your benefit will also continue longer, up to 33 weeks, to hold you until the economy is stimulated.

Losing your job no longer means losing your health care. Now you can keep your coverage and pay only 35 percent of the insurance premium. Under the old rule, you paid the whole premium to keep your insurance. Now, the employer who laid you off pays the remaining 65 percent and is reimbursed by tax credits.

The newly jobless get their tax break by omission. In 2009, the first $2,400 in unemployment benefits are tax free.

Go to College

Save while earning with the American Opportunity stimulus this year and next. College students (family income less than $160,000) get tax credits up to $2,500 toward the cost of tuition and books. Hurry up and enroll. The tax credit is retroactive to the semester that started in January.

Buy a House

First-time homebuyers (family income under $150,000) also get an extra stimulus. Homes purchased after January 1 this year earn up to $8,000 in tax credits.

Buy a Car

Or truck, motorcycle, SUV or RV. But it’s got to be new to entitle you to deduct state and local taxes on your new wheels. The family income limit is $250,000.

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