How Will New Tax Breaks Affect Retirees?

By Dan Bewley and Scott Thompson, News On 6

TULSA, OK -- The stimulus package has many wondering about the impact it will have on their paycheck.

Kathy from Bixby asked The News On 6 a Good Question. She wants to know: "How will the new tax breaks affect those on a pension or Social Security?"

There are $282 billion worth of tax provisions in the economic stimulus package. They range from homebuyer credit, to help with small businesses.

The American Recovery and Reinvestment Act is 577 pages of tax breaks and economic stimulus. Accountants, like Jeff Frable of CCK Strategies in Tulsa, have been working non-stop to learn the new tax code.

"They just got out of an internal education class this morning from 1:00 to 2:00 and we're doing another one on Thursday," said Jeff Frable, Certified Public Accountant.

Frable says the tax breaks will affect those on Social Security.

"There's a one-time $250 payment to retirees, disabled individuals and social security recipients," said Frable.

In other words, if you're on Social Security, expect a check for $250.

Frable says there are a number of other tax breaks that will impact residents in Green Country.

One deals with those looking to buy a new home. You'll get an $8,000 credit if you buy a new home before December 1st of this year. The catch is that you must not have owned a home in the last three years.

The stimulus package also has incentives to help you buy a new car. It makes state and sales taxes deductible on all new vehicle purchases.

"It's like cars, it's trucks, it's SUV's, it's motorcycles, it's even motor homes," said Frable.

Another important tax credit, Frable says, helps those seeking a higher education. The credit covers up to $2,500 of the cost of tuition or other expenses this year or in 2010. Not only is that amount credited to your taxes, but now 40% of it is refundable.

All of the changes will impact your taxes for 2009, so you won't see any rebates until after you've filed your taxes one year from now.

Frable says the new credits can be very confusing, so it's important to contact a Certified Public Accountant if you have any questions.