Edward Posted May 11, 2009 Report Share Posted May 11, 2009 Noted this subject & comments on Military.com which began with: Millions of Americans enjoying their small windrall from President Barack Obama are in for an unpleasant surprise next spring. The government is going to want some of that money back. The credit provides up to 400. to individuals and 800. to married couples. But, new taxs tables issued by IRS could cause millions ot taxpayers to get hundreds of dollars more than they are entitled to, of which some will have to be repaid. At risk are those where both couples work; workers with more than one job; retirees weho have FITW from their pensions and Social Security recipents with jobs that provide taxable income. It further states that the IRS acknowledges problems with the withholding tables but has done little to warn average taxpayers. The paper also suggests that you do a W-4 and take a new look at your withholdings so you don't end up short next year. One example: A Single worker with 2 jobs @ 20000. ea job will get 400. boost in take-home pay for each jobor 800.00. Since he is eligible for only 400.00, then the remaining 400.00 will have to bse paid back at tax time - either thru a smaller refund or a payment to IRS. Same problem for marrieds. Soem retirees face even bigger headaches because the Social Security Admin is sending them 250.00 each - if they have earned income in addition, they will get the credit and thus possibly end up owing some of the excess credit to IRS. Treasury Secretary Timothy Geithner has indicated that IRS understands the concerns and were exploring ways to mitigate that effect. Tom Ochsenschlager, VP of taxation for the AICPA says: 'WASHINGTON NEEDS TO GET THE GOODYEAR BLIMP OUT THERE ON THIS SUBJECT. I am retired from the military and have already reinstated the FITW reduction that I will be getting (66.40 x 12 = 800.00). Also added an extra 15.00 per month withholding since I will also be getting the 250.00 from the SSA. Wow, what a strange situation, no?? Quote Link to comment Share on other sites More sharing options...
Eagles Ridge Posted May 11, 2009 Report Share Posted May 11, 2009 I have been saying this for months now. I have seen that they are going to be holding too much out on working couples. Then I saw that they are changing it for retired people, lowering their withholding, and no benefit for it on tax return. If both are retired, and both claiming married, 800.00 pay back is rough when most of my retired folks like to break even. I need to tell my clients NOW, but writing something short and something people can understand is hard. I want to get something on a postcard, so people will read it, and costs less for me also. Everyone situation is different. Its a mess!!! Quote Link to comment Share on other sites More sharing options...
JohnH Posted May 11, 2009 Report Share Posted May 11, 2009 I think this would fit on a post card: Dear Clients: The administration meant well, but frankly they don't really know what they're doing. The way this credit is being handled is a hopeless mess for some of you. Be prepared to pay next year, unless you want to pay me as much to figure out the correct withholding as I normally charge to prepare your return. And remember that no matter how you fare in 2009, you will definitely be paying more in the coming years. This will result from a combination of: 1) Increased tax rates, or 2) Record-setting inflation resulting from irresponsible & irrational government spending. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted May 11, 2009 Report Share Posted May 11, 2009 How about this one. Dear Clients: The administration meant well, but the change in withholding is going to mess a lot of you up. Be prepared to pay next year, unless you adjust your withholding back to what it was before they changed it. this was not actually a tax change, just a withholding change. If you were happy with your refund or balance due this year, I recommend that you do change the withholding back to what it was before this change. Especially if you and your spouse both work. In that case, if you do nothing you will almost certainly owe. Quote Link to comment Share on other sites More sharing options...
OldJack Posted May 12, 2009 Report Share Posted May 12, 2009 How about this one. Dear Clients: Don't let your payroll department use the new withholding tax tables to determine withholdings from your paycheck or you will owe taxes when you file at year end. Vote the other party next time unless you enjoy paying taxes when I prepare your return. Quote Link to comment Share on other sites More sharing options...
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