Watch your paycheck, Closely!
Did you notice a little bump in your paycheck?
Anyone who is part of a double-income couple better watch his or her paycheck closely. This boost now may cost you next April 15
Here's why: Employers started using a new withholding table by April 1. In one of many recent tax law changes, Congress decided to give wage earners an up-to-$400 per person cut in payroll taxes. The plan was to get this money into workers' hands quickly and out into the economy. Rather than wage earners waiting until next year to file their taxes and get the benefit of this tax cut, the plan was to take less out of paychecks starting now.
But, the new withholding tables in some cases cut too much. If that happens to you, you'll have to pay it back next year.
The tax and accounting business of Thomson Reuters looked at the new tables and found that for a husband and wife who both work and who each earn $75,000, the new tables might mean a cut of $1,228 cut in payroll taxes. But their maximum new tax credit is only $800. So next year, they'd have to pay the extra $428 back.
Thomson Reuters says others who might have too little tax withheld include people who work two jobs, people who receive taxable pension payments and teens or others who are claimed as dependents on parents’ or others’ tax returns.
What to do?
If you think you don't have the right amount of tax withheld, look at IRS Publication 919, How Do I Adjust My Tax Withholding, says CCH, a Wolters Kluwer business and a provider of tax, accounting and audit information.
This new tax break isn't available to everyone. It begins to phase out for those whose adjusted gross incomes are more than $75,000 for singles and $150,000 for married couples filing joint returns.


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Comments
Typical bureaucratic crap. We are offered a stimulus plan, and now we have to be responsible to ensure we don't get too much money withheld otherwise it's not technically a stimulus. I wonder at the end of the day how Americans will get affected by this?
Posted by: Customer | April 17, 2009 9:34 AM
This was NO mistake, this administration is arrogant in its view of the general public. Hey, they voted for a socialist in who spoke like a moderate to get elected.
Posted by: Pat Geiger | April 17, 2009 10:10 AM
I have to laugh at the two responses so far. Wake-up this country was headed for disaster. The new administration is in the process of correcting and undoing 8 years of total mis-management. Maybe my MBA has something to do with it but we are just starting now to get very slowly get America on its feet again. Tax breaks to the middle class is a good thing and taxing the earners that make over 250k is long over due.
It may take the next 8 years for people to learn how to run a country but they will see and in the end they will have a job not like the last 8 years.
Posted by: George Carlin | April 17, 2009 10:31 AM
The previous post says "Tax breaks to the middle class is a good thing..." Somewhere along the line, your MBA education is failing you. The IRS is not going to withhold as much tax from your paycheck now. But by next April 15th, you will still have to pay the same amount of tax. So if you have extra money withheld, you get a return. If you didn't have enough withheld, you pay up the difference. The only change is how much is being withheld until tax day, but the final tax amount is the same. THERE IS NO TAX BREAK. Any fool knows, if you want to change the amount of tax withheld, up or down, just submit a change of dependents on a W-4. I usually get a refund every year. So now I'll get a little more take home each pay check and will get a smaller return next year or may even have to pay up to the IRS. Big whoop. I'll submit another W-4 to amend the difference back to what I've always paid in withholding.
Posted by: Dan | April 17, 2009 10:57 AM
Wow Dan took out only one piece of my entire point. This is what is wrong with Americans, they don't look at the whole world picture. We are on the right track now.
Posted by: George Carlin | April 17, 2009 11:13 AM
Pat,
Happy for your MBA. Isn't that what people go to school for when they don't know what else to do with their life? But I digress. People have a right to complain about this back handed STIMULUS. If you are givin something that you have to worry about later what is the point. Why do we have to worry about their mistakes. You want to bring up last administrations mistakes. Why is it ok for this one to do what they want? Because you and people like you preceive them to be on the side of GOOD. First of all it remains to be seen that only the taxes of people who make over $250 will be raised. You and your fancy degree should be able to figure out it is going to be pretty hard for the top 2% to foot the bill for very long. Remember the last 8 years cost us something like 3 trillion the last 100 days 11 trillion. That is a lot of money for them. Not only are they supporting this Country they have to support our interest in the rest of the world. Good for them. Let us not forget we borrowed this money. I know when I borrow money it comes with INTEREST. I bet this does too! Use that MBA of yours and figure out the interest on $$11 Trillion and Counting. It has only Just begun SWEETY. :) Another thing there are other ways this government will get the poor with taxes, like cigerettes, carbon, green energy ETC.
Posted by: amy | April 17, 2009 11:43 AM
My Comment was directed to George sorry Pat.
Posted by: amy | April 17, 2009 11:50 AM
Stimulus or not I do belief alot of people will get screwed next year when claiming their tax return and learn they will have to pay back money. Lucky for me I noticed that the federal tax amount deducted was less than 10% and had to complete a new W-4, hopefully I will not get trapped with paying back next year.
Most people that live pay check to pay check depend on their on the tax return to pay for lump sum bill yearly, namely income tax and property insurance. But who knows what will happen next year.
So far I have informed my friends and family member to have additional tax witheld to avoid any problems next year. My suggestion is to spread the word and let as many know about this issue that could pose a problem later.
Posted by: Sher | April 17, 2009 12:51 PM
The paranoia goes on and on "what if" "maybe" my taxes go up next year? So what? I am not rich by any means but taxes going up? How much? a hundred two hundred? We need to fix this country and get folks working again. You won't have to worry Amy about paying for taxes without a job.
FYI - An MBA means Master of business administration. You are refering to a liberal arts degree which are for folks who do not know what they want to do yet. Either one would help you.
Posted by: George Carlin | April 17, 2009 2:40 PM
Are we taxed enough yet? There is no hope for the middle class. You know the money the FED lent the banks is interest free,try getting a loan like that for your self. I have to laugh Obama complains he was left a Trillion dollar debt, But he has already outspent Bush by 3 Trilliom Dollars.. I Quess thats what a socialist is all about make it sound like we cant even piss without government help
Posted by: John Writher | May 23, 2009 9:38 PM