Comments on: Alert: New IRS withholding tables kick in April 1

By: CES

CES — Mon, 22 Feb 2010 18:35:39 +0000

Well, I am not sure if anyone has done their 2010 for 2009 taxes yet but because of this lovely tax
credit more than likely you will have to owe the IRS. I received a pay cut in 2009 and kept
my withholding the same as it was in 2008 (I received a refund in 2009 for 2008) and this year
solely because of this credit we owe… Thanks but no thanks OBAMA you can keep your
credit. Lies, lies and more lies!!!!

By: Patricia

Patricia — Mon, 22 Feb 2010 17:33:09 +0000

My question is why do they have the program work April till December 2009… then back to the normal tables. Then in again in April till December 2010 change the tables back to give the credit. It just ends of causing more headaches from January till April. As much as I love my extra $13; I spend a lot more time making changes then the $13 is worth. Not to mention the less informed employees that get confused when their tax withholding keep changing.

By: GMG

GMG — Mon, 26 Oct 2009 16:22:17 +0000

I heard from a benefits rep. that if the healthcare bill passes, employers will report the amount paid for healthcare as taxable income on the employees’ W2. Has anyone heard more on that?

By: Alice

Alice — Thu, 26 Mar 2009 10:23:11 +0000

whoops… in April ‘10

By: Alice

Alice — Thu, 26 Mar 2009 10:21:43 +0000

A tax credit is just that… it is like a child care credit…. it just reduces the tax liability… I don’t see how this credit could be treated any other way. Obviously, we pay in less with the reduced withholding, but our tax liability will be reflected with the credit once we file in April ‘09… at least that is how I see it

By: Judy Buckley

Judy Buckley — Wed, 25 Mar 2009 20:31:45 +0000

Angela: if this is truly a tax credit, as it seems to be, we shouldn’t be “penalized” for it next year. My husband and I once got a $4,000 tax credit for purchasing a solar water heating system. That credit was an actual reduction in the amount owed for the year, so we did not owe that amount of the taxes. If anybody out there is more thoroughly informed about how this present lowering of the withholding will affect us, I would be very interested in knowing, also. If we will somehow owe something on this item which seems to be a tax credit, I’ll adjust my W-4 now.

By: Angela

Angela — Wed, 25 Mar 2009 19:40:44 +0000

So no one has answered will the amount taken out of each paycheck, what will happen next April 15th? Will we be penalized for those extra funds given every week and punished for them at then end of the 2009 tax season?

By: Judy Buckley

Judy Buckley — Mon, 23 Mar 2009 22:58:10 +0000

Brian: OK, I just reread the article again and it does say this is a tax credit, part of the stimulus plan. The withholding tables are changed so that we get 6.2% more of our money in our paycheck – meaning the government wants the withholding to be reduced as the way to pay us our part of the stimulus. Unless there is a piece missing, it does not indicate the government will then turn around and tax us on that increase. The tax percentage has been reduced, as I read this. So, the number of exemptions we claim should be OK. If you feel unsure about it, you can always change your W-4 anyway and request payroll deduct the larger amount. I claim zero exemptions and my husband and I (he’s retired) file jointly. I have extra dollars taken out to cover our social security income, since the government doesn’t withhold from that. And, so far, this has worked out so that we get a return each year.

By: Brian

Brian — Fri, 20 Mar 2009 21:37:00 +0000

judy: i have my withholding at married-0, so does my wife. it allows us to break even each year on our federal liability. we had approx $290.00 w/h bi-weekly. the new w/h tables reduced our w/h to $260.00. multiplied by 20 pays it is a reduction of $1200.00 in our withholding for 2009. however the $800.00 married/joint stimulus is credited- whether thru a credit or an adjustment in the federal tables when we file- we will have had too much withheld based on the new witholding tables. we will have to file a new w-4 and have aditional monies w/h so we will not owe. i think there will be many others in our shoes.

By: Judy Buckley

Judy Buckley — Fri, 20 Mar 2009 18:09:08 +0000

Brian: I just re-read the above article and the way I’m interpreting this, it is a tax credit. That would mean a reduction of the amount of taxes we pay. So, I guess I don’t understand your interpretation that this is an “underwithholding” of taxes and we’ll face sticker shock next year. The article says employees do not need to fill out new W-4’s, so that makes me think this is actually a reduction in taxes and not simply underwithholding. Am I misinterpreting this?