What is the difference between being carbon neutral and buying carbon offsets?

For carbon neutral, the company takes responsibility for directly reducing emissions in any number of ways (buying local, becoming more energy efficient, reducing packaging, substituting raw materials associated with high CO2 emissions, etc).

For carbon offsets, the company pays someone else to reduce emissions but they do not immediately reduce their emissions. It is a stop-gap measure until they can become carbon neutral.

Well its technically impossible for anyone to be truly carbon neutral, so carbon offsets can be purchased to offset any remaining emissions.

Lets say someone does everything possible to reduce their carbon emissions. Then to take care of any remaining carbon emission, they may choose to invest in a carbon offset that gives the money to "trash to energy" installations which would offset x amount of CO2 per $ invested.

Then they would be considered carbon neutral.

About $2,000 a year on to your regular household expenses if Cap and Tax gets passed.

I was searching for something pithy, then read Jim's answer.

Allow me please to simply echo his answer!

One means your are dead, the other brain dead.