What the proposed stimulus means for your pocketbook

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While the stimulus bill is still a work in progress, there are a number of provisions in both bills that you can count on passing. But the reality for the average Jane or Joe is that there's not much there you'll find in your pocket immediately.

The largest amount of direct cash people will see in their account that is still in both the Senate and House bills is a tax credit of up to $500 for each worker and up to $1,000 for two-worker families.

This won't come in your mailbox as a check, however. Instead you'll either see the reduction in less tax money taken out of your paycheck each week or a credit you can write off when you file your 2009 taxes. The tax credit will be 6.2% of your earnings to offset the withholding for Social Security taxes.

Two other provisions to get immediate cash into people's pocket are targeted to the poor. One extends eligibility for the refundable portion of the child credit. People with incomes as low as $12,550 will be eligible in 2009; the eligibility level will drop to $6,000 in 2010. Congress expects this cash infusion will be spent quickly to help stimulate the economy.

Low income families will also benefit from the eligibility changes to the earned income tax credit. For low income families with three or four children that qualify, this could mean an extra $629 in their pockets.

What else is in there for the average person?
If the provisions passed in the Senate survive the negotiations with the House, there could be a $15,000 tax credit for new home purchases. Since this provision is not targeted to first-time buyers, most of the people who take advantage of this will probably put a house up on the market and do little to reduce the inventory of homes already on the market to be sold.

Another provision in the Senate bill offers a deduction on sales taxes if you buy a new car, as well as the ability to write off any auto interest you pay. Sen. Barbara Mikulski, who is the author of this provision, hopes to stimulate car sales with these tax incentives.

The big bucks go to infrastructure, education, health care, and local and state governments with the hopes that these projects will improve the job market. How quickly new jobs related to these projects will trickle down to your neighborhood is anybody's best guess.

Lita Epstein has written more than 25 books including "Surviving a Layoff: A Week-by-Week Guide to Getting Your Life Back Together."
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