What the bailout bill could mean for you

The recently passed Emergency Economic Stabilization Act of 2008 (or, as it is more commonly known,"The Bailout Bill") is a law authorizing the Secretary of the Treasury to spend $700B to purchase distressed assets from the nation's banks. The Act certainly has its supporters and opponents. Supporters believe the bill was necessary to save the US economy from another Depression. Opponents believe it only benefits Wall Street financial instutions that acted irresponsibly and out of greed.

However, the Act does contain a number of features that directly benefit the average American taxpayer. Here are some of the highlights:

The extension of a one year patch for the alternative minimum tax: the 2008 exemption is $46,200 for singles, $69,950 for married couples who file jointly and $34,975 for married couples who file separately.

A credit for energy saving home improvements: you can claim a 10% tax credit for installing skylights, new windows and doors, and new high efficiency furnaces, air conditioners and water heaters but you need to wait until 2009 to do this work in order to claim the credit.

An extension on the forgiveness of mortgage debt: through 2012, you can exclude from gross income the forgiveness/discharge of any mortgage debt. The limit is $2M or $1M if married and filing separately.

Teachers, counselors and other educators in K-12 schools can deduct up to $250 of personal expenses made for classroom supplies and materials. This deduction is an "above the line" deduction so you don't have to itemize to claim the deduction.

IRA owners can contribute up to $100,000 directly to a qualified charity without having to count the contribution as income. This benefit is available in both 2008 and 2009 but you must be age 70 1/2 or older to claim it.

Owners of plug-in electric vehicles are entitled to tax credits of $2,500 to $7,500. This credit will phase out once each manufacturer has sold 250,000 vehicles.