In fact, the money is actually being spent on a website redesign as there’s already an existing “website to foster greater accountability and transparency” in the use of funds covered by the American Recovery and Reinvestment Act of 2009 at www.Recovery.Gov.

So, why do we need a multi-million dollar site to report on how much money the government is spending, especially as we’ve already got one?

In an announcement from the General Services Administration, officials mentioned that the new site will allow “taxpayers to see where their dollars are being spent” but failed to reveal pertinent details about the deal where apparently only 59 companies were eligible to bid for the contract.

Although the Recovery.Gov site is supposed to create greater transparency, the management of its own redesign has certainly been surrounded by secrecy and too many unanswered questions.

As for accountability, it’ll be interesting to see how anyone justifies spending US$18million on a website upgrade.

UPDATE:

As it turns out, the contract’s price tag may be quite understandable if we take a closer look at the details:

1. The current cost of the redesign is only US$9.5 million. US$18 million is the total value of the contract including the possibility of an extension through to 2014.
2. US$9.5 million is still an enormous sum to develop a website when you consider that the technology licensing cost for UsaSpending.Gov (a larger site which tracks the entire Federal Budget) was only US$600,000. Using this as a reference, it may be reasonable to assume that a fair value for the project may fall in the region of US$2 to 3 million.
3. Further investigation reveals that there is a very tight deadline on the project, where the contractor has less than 60 days to deliver a finished product. OMB Watch explains that this could be a major reason for the high cost.

In view of the expedited timeline, the premium included in the project cost may be more understandable, even if it’s still unacceptable.

Despite the slowdown in the overall economy, two sectors offer opportunities for people to save money in the form of tax breaks – homes and cars.

Homes

Some economists predict that the greatest impact of the stimulus bill will not be felt until next year. In 2010 the bill will provide ample funding to state and local governments for employment-intensive infrastructure projects such as highways, bridges, public transportation, and so on. In the meantime, one of the effects brought about by the recession has been to reduce the costs of certain durables and make them bargains.

Housing foreclosures and the spreading bankruptcies of the American car industry have made house and car purchases very attractive, especially when the stimulus bill tax breaks are added to the deal. For example, if you are planning to buy your first home, the government will give you an $8,000 tax credit. This is not only an increase of $500 above the previous tax credit, but more importantly you don’t have to repay the government.

This step should encourage young couples to buy a home and thereby help stimulate the housing market. In turn, it could build up enough momentum to slow down and perhaps even reverse the present plunge in home prices.

Cars

Similarly, the bill enables new car buyers to get a tax benefit by allowing them to deduct the sales tax on the purchase of a new car from their taxable income. If enough people take advantage of this opportunity, it could have a positive impact on the industry – though the recent declaration of bankruptcy by General Motors indicates this measure may be too little and too late.

Still, in a depressed economy when every dollar counts, the tax break on a new car means significant savings. According to the National Automobile Dealers Association, the average price of a new car in 2008 was $28,280, and the average trade-in value of a used car was $15,203.

NADA notes that the common practice is for states to tax the difference, which in the average case would be $13,077. In Massachusetts, for example, the tax rate is 5% rate, which would amount to $654. The stimulus bill reduction would reduce taxable income on the purchase by that much.

Other Ways to Reduce Tax

These tax breaks are only two ways to reduce your taxes. There are two other basic methods of minimizing what you must pay the government each year: you can reduce your taxable income and increase your deductions. Various tax credits reduce your tax. For example, tax credits are available for college expenses, for retirement savings programs, and even for child adoption.

Although not many people may be suited to adopting a child, however generous the tax credits, just about anyone can benefit from taking some college courses, which do not even have to be connected to your career.

• Personal Finance Articles
• Financial Websites

We did a search to find out when the benefits of the American Recovery and Reinvestment Act would actually reach the hands of the ordinary citizens who need the financial help.

Unfortunately, we did not find any conclusive details. However, this is what we did find:

• An MSNBC article is called “You could get your tax rebate by May“
• The “Where’s My Stimulus Payment?” page at IRS.Gov is no longer available. On the site, it mentions that Stimulus payments were required by law to be issued by December 31, 2008. If you did not file a 2007 tax return, you were not issued an Economic Stimulus Payment during 2008.  Please see our Recovery Rebate Credit Information Center for further details on how to claim the Recovery Rebate Credit on your 2008 tax return. If you filed a 2007 Tax Return and need to know the amount of your Economic Stimulus Payment, please visit our How Much Was My 2008 Stimulus Payment application.
• An article which may explain why it takes some time to get your stimulus checks and tax rebates-  “Stimulus plan is making states check fine print“.
• Tax Breaks in Stimulus Plan- Taking note of 2008 tax return quirks

Find out more about how the the Economic Stimulus package directly helps you.

Here’s a list of Economic Stimulus Plans which have been announced to date:

1. United States: US$787bn
2. China: US$586bn
3. Japan: US$516.3bn
4. Brazil: US$283.3bn
5. EU-wide: US$254.6bn
6. Germany (2nd): US$67bn
7. France: US$33bn
8. Canada: US$32bn
9. Poland: US$31.4bn
10. Britain: US$30bn
11. Germany (1st): US$29bn
12. Australia: US$28bn
13. Malaysia: US$18.9bn
14. Hungary: US$15.7bn
15. Singapore: US$13.6bn
16. India: US$8bn
17. Indonesia: US$6.3bn
18. Vietnam: US$6bn
19. Mexico: US$5.8bn
20. Egypt: US$5.4bn
21. Israel: US$5bn
22. Russia: US$5bn
23. Chile: US$4bn
24. Argentina: US$3.8bn
25. South Africa: US$3.6bn
26. Thailand: US$3.3bn
27. Norway: US$2.9bn
28. Italy: US$2bn
29. Finland: US$2bn
30. Portugal: US$2bn
31. Sweden: US$1bn

Note: This does not include the IMF Plans for Hungary, Ukraine, Latvia, Pakistan and Iceland.

Here’s a detailed breakdown on What’s In, What’s Out and Who Benefits from President Obama’s Economic Stimulus Package:

WHAT’S IN

• Tax rebates: Checks of at least $300 for almost everyone earning a paycheck, including low income earners who make too little to pay income taxes, so long as they earned at least $3,000 in 2007. Families with children would receive an additional $300 per child, while those paying income taxes could receive higher rebates.
• Business tax write-offs: Spur business investments with bonus depreciation and more generous expensing rules.
• Housing rescue: Allow more subprime mortgage holders to refinance into federally insured loans by raising the limit on Federal Housing Administration loans from $362,790 to as high as $729,750 in expensive areas. Increase the availability of mortgages by providing a one-year boost to the cap on loans Fannie Mae and Freddie Mac can buy, from $417,000 up to $729,750 in high-cost markets.

WHAT’S OUT

• Permanent tax cuts: Republicans conceded that their top priority would have to be left out.
• Unemployment insurance: Democrats wanted to extend benefits past 26 weeks.
• Food stamps: A boost for benefits.
• Medicaid: Democrats gave up on including Medicaid payments to states.
• Low-income heating subsidies: Democrats are surrendering the fight to include them.
• Infrastructure spending: Spending on transportation or repair projects already under way is off the table.

Who benefits from the rebate plan

How Americans in different financial situations would fare under the rebate plan proposed by House leaders and the White House.

• An individual with $2,500 in earned income in 2007: Disqualified because income fell below the $3,000 threshold. No rebate.
• A married couple with no children, with adjusted gross income of $100,000 in 2007: Would qualify for the full $1,200 for couples. A $1,200 rebate.
• A worker with one child, who earned $9,000 and owed no taxes in 2007: Would qualify for the $300 rebate available to individuals who pay no taxes but earned at least $3,000, plus an additional $300 for the child. A $600 rebate.
• A couple with income of $145,000 in 2007, with three children: Would qualify for the full $1,200 for couples, plus $300 for each child. A $2,100 rebate.
• A couple with income of $160,000 in 2007 with two children: Would qualify for a partial rebate, reduced by 5 percent for every $1,000 in income above the $150,000 threshold. An $1,800 rebate – $1,200 for the couple plus $300 per child – would go down by 50 percent for this family. A $900 rebate.
• A couple with income of $200,000 and four children: Disqualified because their income exceeded $174,000, the phase-out limit. No rebate.
• An individual with adjusted gross income of $23,000 and no dependents would get a rebate of $600.
• A couple with adjusted gross income of $160,000 and two children would get a rebate of $1,300.
• A couple with adjusted gross income of $184,000 and two children would get a $100 rebate.

Source

You can Read the The American Recovery and Reinvestment Act of 2009 or Download the Legislation.

For tax questions, refer to the IRS Information Related to the American Recovery and Reinvestment Act of 2009.

This is a summary of the 1,073 pages in the Bill which allocates US$787,241,000,000:

• Transportation and Housing: $61,795,000,000
• Aid to States: $53,600,000,000
• Tax Cuts: $301,278,000,000
• Individual Aid: $45,788,000,000
• Individual Healthcare Aid: $24,749,000,000
• Aid to States for Medicaid: $90,044,000,000
• Labor and volunteering, healthcare and social services, education, social security: $72,564,000,000
• Energy and the Environment: $50,825,000,000
• Commerce, justice and science: $15,920,000,000
• Food and Farming: $26,466,000,000

As you can see, more than 30% of it is going on Tax Cuts with the balance planned for stimulus spending. Generally, everyone will benefit with some more than others:

• Self-Employed: eligible for up to $400 a year for singles and $800 for couples
• 1st Time Home Buyers: claim up to $8,000 tax credit if you buy a home this year
• Home Energy Improvements: Up to $1,500 or 30% of project cost for energy efficiency credit
• Auto Buyers: deduct state and local sales or excise tax on the first $49,500 of the vehicle’s cost
• Students: Credit for college expenses increased from to $2,500 from $1,800 and the term extended from 2 to 4 years
• Unemployed: $25 increase in weekly check and potential to add 33 weeks of unemployment benefits

If you’re wondering how the economic stimulus bill affects you, click here for more information about the economic stimulus package in detail.

Source: Mint, WSJ