We have discussed the tax savings purposed in the stimulus plan before, but we are still getting questions regarding it. Here's a quick review of what we are possibly looking at.
The centerpiece of President Obama's election campaign was the Make Work Pay Credit, which is where most of the savings will be accounted for. Congress is still hashing out the terms of the economic recovery package, but it could be mean as much as $500 a year for individuals and up to $1,000 for couples.
The full credit would be available for 2009 and 2010 and is limited to those who make $75,000 or less and $150,000 or less for couples filing joint returns.
The Make Work Pay Credit is also planned to be refundable, which means that even tax filers without any income tax liability would receive one.
Middle and upper middle class would also be protected from the Alternative Minimum Tax or AMT by an amendment that was added to the Senate bill this week. In recent years the AMT has threatened those lower on the income totem pole (the AMT was originally intended primarily for high income taxpayers). The amendment was not in the original House bill, but is expected to make it into the final bill.
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