Making work Pay (Not)

[Diane]

Here's where Making Work Pay is starting to screw up taxpayers. Client worked 5 jobs. She's a nurse. Made $30,000 more this year than last year. That increase put her over the limit for the $400 credit. But, each one of the jobs had the reduced withholding. So, with the increase in income putting her into a higher bracket along with the reduced withholding and no credit, she is looking at a MUCH reduced refund this year. Because of working 5 different jobs she wasn't aware of the reduced withholding and, of course, most employers did not totally inform the employees of the reduction. And, the IRS was a little late in passing the info along about checking your withholding and maybe increasing it to cover these circumstances.

Diane

[mcb39]

At least it sounds as though she is getting a refund. Many taxpayers with similar circumstances or taxpayers who had several jobs wherever they could find them, are having to pay because of this underwithholding. We all know what happens to people who work several parttime jobs when it comes to Federal withholding.

[chuck]

Explain she got the same amount of money during 2009 just got more each week and less at the end. Can't get more each week and more at the end in most cases.

[TAXBILLY]

It's hard to educate taxpayers that getting a big refund is not a good thing. They seem to think they are making money when they get a big refund.

taxbilly

[chuck]

Sending factory jobs to other countries with low wages to keep prices down here seemed like a good idea to some and look what that policy did to the middle class workers here.

[Catherine]

It's hard to educate taxpayers that getting a big refund is not a good thing. They seem to think they are making money when they get a big refund.

taxbilly

On the client copy of the return I highlight the "total tax" line (#60 this year).