Making Work Pay Stimulus Program

For those of you who might have noticed a change in your paycheck earlier this year, let me fill you in on a few things. The government decided that rather than give out “stimulus” checks this year; they would adjust your withholding and give you a little bit on each paycheck. The IRS issued new withholding tables to help employers figure new deductions. However, the new withholding tables do not consider if you and your spouse are working your withholdings will give you more than the $400 so you might owe at the end of the year. Also, if you work multiple jobs, you will be getting less withheld on your check at both jobs which could in the end cause you to owe money.

For example: You are married, and both you and your spouse work. You each get paid $2000.00 a month. Your old withholding for federal is $133.54 your new withholding would be $68.75 – a difference of $64.79. Remember this difference will be calculated on you and your spouse. So if your employer changed your withholdings on April 1 that would amount to $583.11 less withheld on your check and $583.11 less withheld on your spouses check. Yes it is great to get the $1,166.22 now, but most people will spend that and not think…. “Oh I might want to save this to give to the government later.” The problem here is that there will only be an $800.00 credit on the tax return. So this married couple could owe on their taxes.

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