When Will Obama’s Tax Cuts Take Effect?
CC photo by Phillip
If you’re married and making less than $250,000 ($200,000 as an individual), you’re probably going to see your taxes drop. But when will Obama’s tax refunds take effect? First, let’s take a look at what you might be saving under Obama’s tax plan.
How Much will my Taxes be Cut Under Obama?
- So long as Obama’s plan does as it promises, you will see:
- A tax refund of $500 per individual ($1,000 per married couple) if you’re making under $200,000 ($250,000 if married). If under those thresholds you will also not see your tax rate increase.
- If you’re a homeowner and don’t itemize your taxes, you can claim a 10% Universal Mortgage Credit. This averages out to $500 per homeowner.
- Your capital gains tax rate will stay the same unless you’re making more than the ‘$200K/$250K’ threshold. If you’re over, it’ll go up 25%.
When will Obama’s Tax Cuts Take Effect?
Obama’s tax cuts will effect your 2009 tax return (April of 2010). However, it’s been speculated that the $500/individual and $1,000/couple tax refund may also be included with your 2008 (April 2009) taxes as a second round of economic stimulus checks.
Want to Find Out More on how Obama’s Tax Plan will Effect you?
- Check out the Obama Taxcut Calculator.
- Read into the details in Obama’s tax plan factsheet.
- Or, check out the Tax Policy Center’s take on Obama’s plan.
Reader Feedback:
- How much will Obama’s tax plan save/or increase your taxes?
- Do you think Obama’s tax plan is fair?
If you found this article helpful, you can subscribe to the 20somethingfinance RSS feed, or sign up for free email updates. You may also find the following articles of interest:
Who Will Cut my Taxes More, Obama or McCain?
Three Reasons why Tax Allowances are Bad & How Allowances can Help
I was thinking that a President’s tax plan would take effect in the year they start, which would be 2009 for Obama. However, it makes sense that it would be the TAX YEAR that they start. It looks like I’ll be getting $500 back more than I would have before. Thanks for the info.!
Thanks for the info and the tax calculator. I am new to doing my own taxes and to be honest and kind of out of the loop when it comes to his new plan and how it will affect everyone.
Craig
http://www.budgetpulse.com
He can think of cutting taxes later, now he must be very busy in throwing out bush from whitehouse
I believe it’s fair to expect that those who make more, pay more. of course, this must be tempered with the sense of fairness, that those who work harder should expect to get more from it, as well. I believe that Prez-Elect Obama’s plan finds a nice medium betwixt the two.
The problem, of course, lies in the fact that this has to be a federal level thing. 250K is worth a different amount in southern Alabama then it is in New Your City, for example.
Still, as limits go, 250K is pretty damn good. I remember an hour long argument between a professor & the class, when the professor made a comment that implied that those making under 500K were “middle class”. I raised my hand to argue this point (as 500K was low-rich), and it was interesting to see the way the professor tried his hardest to convince us that [essentially he] was still middle class.
@ PF, Craig - yeah, it was something I wasn’t quite sure of either since I’ve only started doing my own taxes in the last 5 years.
@ Mega - Agreed.
@ Allen - Your second point is well taken. I can see how someone in NYC may feel slighted. COLA worked into taxes would be scary though.
This is not a tax cut. Get it right folks. The tax tables have not changed. You will have to pay your normal tax rate on this money come tax time next year. So that 500 is more like 400. I received 600 from bush tax free. Thanks Obama.
HARDLY tax free: An increase to the national debt is something we all have to pay taxes on, down the road. That’s like saying you get your new TV for free, just becuase you don’t have to make a payment on the credit card for a year.
I can’t agree with the last comment more! I have been told by my CPA that my taxes will be increase by 15% so I will be paying 55% instead of 42% since I fall slightly over the limit. Does this seem fair when 40% of people in the US pay 0 tax and once his plan goes in effect, it will increase to 50%. I have been working for over 20 years, sixty hours a week for many of them. My mom was on welfare, I didn’t want that life so I pushed myself to get ahead and now the Government is trying to penalize me. What is the incentive to work harder, be successful and make more money when you can work less and make more in the end? We will be paying this debt off for generations to come. The stimulus plan has billions of senseless spending. I don’t think a lot of people in our country are educated enough to take a look at the big picture and our future. They want to live day by day, take advantage of the system, rely on the Government so eventually we will become a socialist country.
What if i already filed my taxes before the tax plan was approved? Will i still get the $500 somehow?
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