Tax Breaks in the Stimulus Package: Do You Qualify for Tax Breaks? Review Obama’s stimulus package

President Barack Obama has announced a $787 billion economic stimulus package. Here are some key points from this stimulus package to help you understand the tax breaks. These would also help you check if you qualify for the tax breaks in this new package:

First-time homebuyers are eligible for an $8,000 tax credit. Last year it was a $7,500 credit that is not paid back until you sell your house within 3 years. This credit is primarily available to taxpayers who purchase a primary residence in the middle of January. December 1 and 1, 2009. Not available to taxpayers whose AGI exceeds $75,000, or married couples $150,000.

· Buyers of new cars and trucks would be allowed to deduct sales or excise taxes. It is an above the line deduction. One does not have to itemize to claim this.

This is in addition to existing Hope college credit. Parents would be allowed to claim a tax credit of up to $2,500 each year to cover higher education expenses. In this case, the income reductions are higher than those of the existing higher education tax credits. Individual taxpayers with AGI up to $80,000 could also claim a full credit. Married couples could have AGI up to $160,000 and therefore claim a full amount.

To wake some of you up, even unemployment benefits are taxable. Here the stimulus package excludes the initial $2,400 in unemployment benefits from taxes in 2009. The stimulus package also makes it easier for unemployed Americans to continue employer health insurance coverage.

mFor singles, you are not eligible for unemployment benefits from the stimulus package in case you earn more than $3000. At par, you will not be taxed. Below that, you enjoy a grant based on your income.