Posted on 04/30/2009 11:07:24 PM PDT by ma bell
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.
(Excerpt) Read more at finance.yahoo.com ...
Hold on..... wait for it......
“I am ah sorry. I wasn’t ah aware of this ah ah mistake. Ah I ah will make ah ah sure that ah this ah will never happen ah ah again”
(MSM: “Oh Obama, you truly are the messiah”)
With the IRS it’s situation normal........
GOOOOOOODDDD FOR THE GOP...
Imagine the shock on all those faces, they will really have OBRS
Obama Buyers Remorse Syndrome.
WOW ... Less money withheld means MORE INCOME, I guess so thus MORE Taxable income, thus more taxes next April...
WHEN FUHRER OBAMA gets done HOPING, you might wanna PRAY that you have some CHANGE left over.!!
The four or eight dollars a week you see in your paycheck will come back to haunt you on April 15, 2010.
My suggestion is to open a separate savings account. Change your withholding so you get more each paycheck and deposit $50 to $100 (or what your income level is) into the new savings account. Then don’t touch it.
The gov’t doesn’t get all the money it expected and you earn interest.
Then pay your tax bill in April.
You had me up until that last part.
/johnny
A few bucks more per paycheck?
Cool!
And it only costs us taxpayers about 12 trillion dollars to get it.
Change your withholding so you get more each paycheck and deposit $50 to $100 (or what your income level is) into the new savings account.
.
Also could pay down the mortgage principle, then, your regular payments also start paying a little more on the principle and you’ll pay less interest/more pricible. Possibly a delicate balance, so try changing the withholding allowance slowly, 1 to 2 to see the difference
That's what we do. We're working on paying off our debts right now because of what's coming (my husband works with bankers all the time), and people are going to need every penny they can save. We'd rather keep the interest for ourselves. We don't buy anything we don't absolutely need, either.
There's no way we're going to be used by the democrats as voluntary slaves. There's no way we're going to give this administration one penny we don't have to. We're not going to be part of any of this. Sending money to Washington now is like paying tithes to Satan.
Remember, during the depression those who had no debt lost little. Those with debt lost everything.
Oh yeah - Starve the beast. Join Operation Thrift. Put more money in your OWN bank account.
The way I understand it is that the govt withholds a little less per pay period, but that amount is added up at the end of the tax year then added on to your income. Possiblility to push a taxpayer into the next bracket. This govt giveth and taketh away with interest.
CHANGE
Typical of all government programs - run by incompetents.
Even before this passed, some of us tried to explain this to the younger, Double-Income couples in the office but no one understood (or willfully chose not to research the issue). I’ve printed this article and others to have them see it in print. Come next April, they won’t be able to say they weren’t warned.
Wow, I already know the tax credit was a scam, but now they are compounding it.
I told everyone I knew when this started - “all they are changing is what they are withholding, the actual income tax owed tables are not changing” , the result is everyone will have to pay back the credit when they do thier taxes — now with the “mistake” that payback will be even more.
“The average refund was nearly $2,700 this year.”
Yeah, in my dreams. I’m self-employed. Every month I take a percentage right off the top of gross receipts and escrow it for taxes. Last year it was 40%. Despite paying estimated taxes, I still owed last month, and paid the 1st estimate for ‘09, too. This year, thanks to King Zero, I raised the percentage to 45%.
When I went out on my own and discussed estimated taxes with a colleague he said “you will be astounded at how much you have to pay in taxes. If every American had to pay taxes this way, we would never tolerate the size of government we have.”
This isn’t how tax credits work, even mislabeled ones like the Chairman has pushed. I’m surprised at the number of people here who don’t understand taxes.
First of all, your tax is calculated on your total taxable income. This has nothing to do with with withholding; if you withhold more your tax is still the same amount and the government cuts you a check at tax time. Similarly, if you withhold less, this cannot possibly push you into a higher bracket. You simply owe at the end of the year (possibly with penalties).
Second, the fact that the tax tables are not changing is irrelevant. The credit operates outside of the tax tables (which is precisely why it’s not a real tax cut). Unless I’ve moved to bizarro world, however, the tax tables are an incredibly small part of the tax owed for the average family. Reading the article would’ve made this clearer.
At a basic level, we have a fully refundable tax credit that can be claimed by pretty much anyone. The IRS, in their infinite wisdom under Turbo Timmy and the Chairman, decided to try to be clever and adjust everybody’s withholding. Perhaps not surprisingly, they screwed up somewhere (most likely they couldn’t do the math). This is resulting in people’s income being increased by an amount they will have to pay back. This is not to say all of it, of course - the article states their income is increased by $1200 from the withholding errors but they are only eligible for an $800 credit. This results in an increase in tax owed by $400, which you would think would come out of the $1200 extra they’d received.
I don’t know if this was intentional or not, since if they accurately withheld an amount such that you received the tax credit over the course of the year if and only if you were eligible, most people would realize it’s inconsequential. The point is, it’s inaccurate to say that the total tax owed will not change. It’s also inaccurate to say (as people will inevitably do next year) that their taxes actually went up because they owe more in April of 2010 than they did in April of 2009.
OK. I’m not a tax accountant, but play one on tv.
Thanks for the clarification, everything I have read led me to understand that the “credit” was just a change in withholding, I was not aware that people would get to claim the credit at the end of the year so that they did not end up paying taxes on the amount not withheld.
OF course, that doesn’t change the fact the morons at IRS screwed up the withholding tables, but it does make the credit make more sense.
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