Rude surprise awaits taxpayers

Discussion in 'Up to the Minute' started by Dark Knight, Apr 30, 2009.

  1. Dark Knight

    Dark Knight New Member

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    WASHINGTON – Millions of Americans enjoying their small windfall from President Barack Obama's "Making Work Pay" tax credit are in for an unpleasant surprise next spring.


    The government is going to want some of that money back.


    The tax credit is supposed to provide up to $400 to individuals and $800 to married couples as part of the massive economic recovery package enacted in February. Most workers started receiving the credit through small increases in their paychecks in the past month.


    But new tax withholding tables issued by the IRS could cause millions of taxpayers to get hundreds of dollars more than they are entitled to under the credit, money that will have to be repaid at tax time.


    At-risk taxpayers include a broad swath of the public: married couples in which both spouses work; workers with more than one job; retirees who have federal income taxes withheld from their pension payments and Social Security recipients with jobs that provide taxable income.


    The Internal Revenue Service acknowledges problems with the withholding tables but has done little to warn average taxpayers.


    Much more at link:



    http://news.yahoo.com/s/ap/20090430/ap_on_go_ca_st_pe/us_tax_credit_pickle
     
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  3. Hopeful One

    Hopeful One Blessed are the cracked for they are the ones who

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  4. Moe

    Moe New Member

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    Talk about bait and switch, I have to stop reading this stuff, it's making me crazy.
     
  5. chesterp

    chesterp Former Member

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    Thanks for the info... I appreciate all your threads and learn so much from them.
     
  6. Kat

    Kat Kind words do not cost much

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    Ouch. I agree Moe, the ol' bait and switcheroo. I noted that his approval rating has dipped a bit, wonder what it will be like after this comes to light?
     
  7. Marthatex

    Marthatex New Member

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    It's not a "bait and switch". Evidently the withholding table gives marrieds filing jointly and people with two jobs MORE than the tax credit they are entitled.

    Sounds like it's a good idea to check the Witholding Calculator and make sure you are getting enough withheld from your check according to what you expect your tax liability to be this year.

    You will still get the basic $400 or $800 tax credit for this year. ETA your tax credit would not have to be paid back, but your overpayment would be.
     
  8. ziggy

    ziggy New Member

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    Except that the point is that they didn't have this problem fixed BEFORE they started the credit and now they are not effectively WARNING those who will be effected.

    That is quite unfair.
     
  9. Dark Knight

    Dark Knight New Member

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    I agree it probably wasn't bait and switch, but as the article said, they need to do a better job telling people to check their witholding to make sure they don't end up paying next year. That's why I posted the story, so people can start checking in on that before it's too late. Hopefully word will get around better. I certainly didn't know this.
     
  10. jnTexas

    jnTexas Can't wait for softball and baseball to start :-)

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    Well it effects everyone accept the people here illegally WHO DON'T PAY TAXES!:furious: If only they would go to a flat sales tax. then everyone would be paying their fair share!
     
  11. Marthatex

    Marthatex New Member

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    Of course; I wasn't questioning your posting this, just the "bait and switch" comments.

    People do need to check their withholding amounts.

    It's far better to take home too much and owe at the end of the year, than let the govt. keep your money and then get a no-interest refund from them.

    (married couples - if you're taking home a hundred-a-month more than you were, and didn't get a raise, then that might be too much. $800 divided by 12 would be $66 a month less withholding, the correct amount)
     
  12. Dark Knight

    Dark Knight New Member

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    I know you weren't, I was just agreeing with you. :)
     
  13. MissieMt

    MissieMt New Member

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    Well, maybe for some it is better to have to owe at the end of the year...those who can afford to owe at the end of the year.
    Unfortunately for us, we have been slammed these past two years. Do we make alot of money, absolutely not. We struggle, struggle, struggle every month. We have adjust our W-2's so that a rediculous amount is deducted every month. I even quit my full-time job because it threw us in another tax bracket and between owing every April and daycare we couldn't afford for me to work full-time! What type of life is that?!
    To the average American, when they passed this, the government made it sound like they were doing us some awesome favor. They were more than happy to "get the word out" about it. Now that they have screwed up Mums the word. So maybe it is not a bait and switch but it's just as dirty, if not more so, imo.
     

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