Our financial crisis is being combated on many sides, with a seemingly endless series of opportunities for people facing serious hardships. I thought it would be helpful to summarize all the options created as a result of the American Recovery and Reinvestment Act of 2009 and give you just the facts that you need in order to consider pursuing one or more of them.
1. Mortgage Refinancing and Modification
You may be having trouble making mortgage payments (either your rate went up significantly, or your income decreased, or maybe both), or you’ve been paying your mortgage on time but your home value has decreased, so you can’t take advantage of lower interest rates. Help is available for both groups.
Visit MakingHomeAffordable.gov, and find out if you are eligible.
Also worth pointing out on that site is the special Beware of Scams page. The idea of losing your home is one of the more frightening ones I can think of. People may not always make sound decisions.
Earlier coverage of this from Consumerism Commentary
2. Tax Reduction for 95% of Working Americans
You don’t have to take any action to benefit from this. You’ll either notice your regular paycheck increasing, or you won’t.
Earlier coverage of this from Consumerism Commentary
3. $250 for SSI or Social Security Recipients
There’s a one-time payment of $250 that should be made by the end of May 2009 for people on Social Security, a veteran with a pension, or people with disabilities. You don’t have to do anything special to receive this, either. More information at Social Security Online.
4. Tax Credits for Making Energy Efficiency Improvements
The Low Impact Living blog has a great summary of the different ways you can save in 2009 by making specific “green” improvements. I’m seriously considering a few of these.
5. Over $15 Billion for Medicaid
I don’t know much about Medicaid, except that many people rely on it, and if you were worried that you wouldn’t be covered, there’s a good chance you will be, now. Read the Press Release at the White House.
6. Tax Credits for Buying a House
There was a tax credit for buying a house last year, and there’s a tax credit for this year. They have different rules and Flexo did a great job explaining both, and how to act on either one.
7. Tax Deduction for Buying a Car
Trucks are included, too. If your income isn’t too high (taxable income of $125,000 / year or $250k for couples filing jointly), you can deduct the sales tax on a new vehicle. Read more (especially the first comment) at the Sound Money Matters blog.
8. More Money for Students
An additional $17.1 billion in Pell Grants means an increase of a maximum Pell award from $4,850 to $5,350. There’s also an additional $200 million for work study programs. Quite a lot more information at the U.S. Department of Education Web site.
More details about this, additional credits and 529 plans can be found at the Online Education Blog.
Summary
Whether you think the ARRA is a good idea or not, it’d be foolish not to take advantage of the opportunities that make sense for you and/or your family. Mostly, though, I hope the growth of our various tent cities slows down really soon.
I produce a lot of garbage, and I’m not talking about just my writing. Here’s one reason: Even though the grocery store is only about a block or two away from my apartment, I tend to take large shopping trips infrequently rather than smaller trips more frequently.
Here are the problems with this approach.
I’ve been going through a large number of plastic bags, producing more garbage than necessary. Formerly, I saved the plastic bags with the intention of reusing them for the next trip, but I never did so. This usually resulted in a ball of increasing size underneath the sink in the kitchen, consisting of crumpled plastic bags. Every once in a while, when I decided one particular ball of bags would never be used, they would go in the garbage and the process would restart.
Also, because I wait long between trips, I have a lot of food and paper products to buy, more than I can carry in one trip. Rather than walking two blocks to the store, I drive from one parking lot to the next to pile the full bags into my car, transport them back to my apartment, and carry them up to my second-floor apartment in multiple trips.
I’ve solved the first problem. Stop & Shop, my local grocery store, offers reusable fabric bags for sale. They cost $0.99 each and one fabric bag holds more than one plastic bag, and it does so more comfortably. Every time you bring a fabric bag back to the store and use it for your shopping, the cashier will provide a $0.05 credit per bag on your receipt.
I purchased ten bags in a recent shopping trip to help reduce my plastic usage. In order for this purchase to “pay off” for me, I’ll need to buy 198 bags of groceries. My initial purchase was probably too high — I didn’t realize the bags were so capacious. For one of my large shopping trips, I use only five or six bags. At that rate, it will take 33 to 36 trips to the groceries, or about three years, for me to “break even” on my purchase.
More importantly, I won’t be producing as much plastic garbage.
In terms of the second problem, my girlfriend suggested I purchase a cart to transport my groceries to eliminate the necessity of driving. It’s not a bad idea. It would reduce the short trips I take in my “gas-guzzling” Honda Civic and provide me with more exercise. I’m just about out of storage space in my apartment, however, so I’m not quite sure where I’d leave the cart when not in use. I understand there might be folding carts available, in which case, I could probably store the cart in the closet, so I’ll have to research this further.
CNN Money is offering seven suggestions for reducing your tax, all possible before filing your 2007 taxes. The first suggestion is to “re-energize” your home.
You can reduce your tax bill by up to $500 if you install insulation, windows, doors or central air conditioning that meet certain energy conservation standards. You also can take a credit up to $2,000 if you install a solar-powered hot water system or solar photovoltaic panels, which convert sunlight into electricity.
While this tax credit sounds interesting, I don’t see it as an immediate financial advantage for the taxpayer. Yes, making these changes may increase the “value” of the house, but only if a buyer recognizes that down the road. You won’t get as much tax back as you would spend to make these changes. So you’ll owe the government less, but more money will leave your pocket. Here are the credits you can expect to receive:
* $50 for each advanced main air circulating fan
* $150 for each qualified natural gas, propane, or oil furnace or hot water boiler
* $300 for each item of qualified energy efficient property.
Even if you go on a spending spree, the maximum credit you’ll receive on your tax form is $500. From a financial standpoint, this is likely not worthwhile, but green energy will eventually be less harmful to the environment. I’d like to see better incentives.
7 Year-End Tax-Saving Moves [CNN Money]
Treasury and IRS Provide Guidance for energy Credits for Homeowners [IRS]
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