Stimulus plan offers taxpayers a variety of breaks: what they mean to you
The stimulus plan that President Obama has signed into law contains a few tax treats for individuals. But before you jump for joy, please pay close attention to the details so you know exactly which provisions can benefit you, and how.
One of the biggest breaks being trumpeted is a new $8,000 first-time home buyer tax credit. I say "new" because some believe it completely replaces the $7,500 tax credit passed as part of last year's Housing and Economic Recovery Act. It does not.
There are two breaks for first-time homeowners in the tax code now. Which credit you can take depends on when you purchased your home.
If you're a first-time home buyer and you purchased your home on or after April 8, 2008, and by Dec. 31, 2008, you do not qualify for the $8,000 first-time home buyer's credit recently signed into law by Obama.
You can still take the $7,500 tax credit, but you have to pay that back because it's not really a credit. It's a 15-year, interest-free loan from the IRS.
The $8,000 tax credit is available for qualifying home purchases made from Jan. 1, 2009, until Dec. 1, 2009. Did you notice I wrote Dec. 1? That's how it's worded in the law.
At least the $8,000 is a true credit, that is, if you don't plan on moving within three years. A tax credit is much more valuable than a deduction. A credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable.
If you are still not sure which first-time homebuyer credit you qualify for, call the IRS. You don't want to end up owing money on a loan you thought was a credit.
Here are several other tax breaks passed into law:
One more thing, please note that many of the tax breaks in the stimulus plan only apply for your 2009 tax return - not the current tax filing season.
Michelle Singletary is a columnist for The Washington Post. She can be reached at singletarym@washpost.com. 
