Obama's Stimulus Package Explained: What It Means to You

Here's a quick look at some of the tax breaks the new stimulus plan authorizes (for a more detailed look see the Wall Street Journal):

1. Making Work Pay tax credit.  An eligible worker would get 6.2% of earned income up to a max credit of $400 (for two income earners it's $800).  What this means is that workers would see an extra $12-$20, per pay check.  If you make more than $95,000 (single) or $190,000 (couples) you will not qualify.

2. New homebuyers will get a tax break in the form of a $8,000 subtraction from the income tax they owe (on a principle residence purchased through 11/31/09).  There is a phase our for individuals earning between $75,000 - $95,000 and couples with an income of between $150,000 - $170,000.

3. The Alternative Minimum Tax increases exemption to $46,700 for individuals and $70,950 for couples.

4. If you've lost your job you will be able to forgo taxes on the first $2,400 of unemployment compensation (in previous years, all income from unemployment was taxable).

5. Cars buyers get to deduct sales tax on a new car purchase. (for purchases up to $49,500 from the day the stimulus starts through the end of 2009).  Of course, the deduction phases out for singles with a salary between $125,000 - $135,000 and couple earning between $250,000 - $260,000.

6. If you've lost your job, maintaining insurance through your old provider got easier in the form of a 65% reduction in cost.  Cobra costs also get cheaper.  There are also qualification in terms when you got laid off.

7. The American Opportunity education tax credit allows for a $2,500 partially refundable tax credit to cover all four years of college. (this goes until 2010 and thereafter the Hope Credit comes back into play).

8. If you have a 529 college savings plan you can use withdrawals in 2009 and 2010 to purchase a computer or "computer technology" (previously the college needed to stipulate that a computer was needed for study).