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Obama's Stimulus Package Passed, What Will You Do With Your $400 Tax Credit?

 I'm In Debt - Posted: 2/14/2009
The house has approved the $787 billion stimulus package (even without Republican support), and the result includes a $400 per-worker tax credit for 2009 and 2010.  The tax credit means the government will take a little less out of your check each week toward taxes, and has been estimated to be an extra $13 in your check each week for the rest of 2009, and around $7.70 per check throughout 2010. If you are self-employed like me, you will be able to adjust your quarterly tax filings to account for the credit.

For those of us who are really struggling financially, the first thing we're all thinking is how much of a joke $13 a week is, right?!  After all, what can you possibly do with an extra $13 a week that you couldn't do before?  Not a heck of a lot, but let's see if we can make the most of it anyway. Here are some tips for using your tax credit to stimulate your financial situation:

You Can Pay Debt Off Faster

Again, I can hear you laughing at me.  How can $13 a week help you pay off your debt faster?  Well, $13 a week is about $52 a month. If you've got a credit card charging you 18% interest... add the $52 a month to your current monthly payment of $120 and the card that would have taken you 19 months to pay off will now take 13 months to pay off.  You can use Destroy Debt's Budget Tracker to see how extra payments will help you pay your accounts off faster.

Whatever you do, don't just act like the money isn't there, because you'll spend it and not realize it.  After all, it's only $13 a week!  But if you plan to use it toward debt repayments each month, your extra $52 will go a lot further.


Anthony (Guest) - BoatChick,  Based off your response, I find you very interesting.  Great answer!!!
rhitter94 - Well, here in California, we got our taxes increase, so good-bye to the extra $13 per week.
boatchick - I've always adjusted my tax withholding to have the least amount wthheld, yes my refund for the interest ree loan to our government is lower at year end but I have the funds for living today.  Why anyone has to pay 20+% on CC's to be able to survive while giving the government a loan(tax withholding) at 0% to bail out corporate irresponsibilty just makes no sense. So the president is allowing us to have access to our funds it's just another smokescreen to make us think we are getting something when in fact we are not.
lou (Guest) - despite what your president and your paystubs say, this $400 stimulus is not like the last one we got (the tax-free $600 checks). you are not getting any additional money that you didn't already earn. all that has changed is the payroll withholding table, which calculates how much the IRS takes from you each week. the amount the IRS takes is only an estimate, and most people usually get refunds. but with this "$400 stimulus", if you got a $400 refund last year and your income remains the same this year, you will get no refund. basically $400 of your regular refund is being paid out early. you could get the same result by asking your employer to raise the withholding number on your W-2. so plan ahead! you will have $400 less in your refund check for the 2009 tax year!
haimanyam - good article which has a lot of info in it nice one