Monday, October 26, 2009

Obama steals your tax refund

As the Philadelphia Inquirer reports today, Pres. Obama's "stimulus" plan lowered the amounts for IRS withholding for many. This means you may have had an increase in your take-home pay. The catch is that Obama didn't actually lower tax rates, just the withholding: So, in April, many people will find their refund check surprisingly small. The Inquirer writes:
That little extra bit of money in the form of a larger paycheck tied to the Obama stimulus plan could end up taking a bite out of your federal income tax refund or even leave you owing taxes, say observers.

The stimulus plan lowered federal income tax withholding rates, which results in more take-home pay but less money going toward taxes. The downside is some taxpayers may end up with not enough taxes being withheld to cover what they owe in 2009. ....

Single taxpayers who are working at more than one job and married couples filing jointly in a situation where both spouses work are the most likely groups of taxpayers to be caught short.

"They are probably going to find out they are either getting a lot less back or they might owe," said Mark Steber, chief tax officer at Jackson Hewitt Tax Service, a tax preparation firm.

Others that could face this scenario are those who can be claimed as a dependent on someone else's tax return (for example, a working student claimed as a dependent on a parent's tax return) and some Social Security recipients who work.

No comments:

Clicky Web Analytics