Federal Income Tax Withholding Change!

[Lady D]

Has anyone else done a rough copy of their taxes to find that the federal income tax withholding changes as to withholding less in order for people to have more income on their paychecks is causing them to have to pay a huge amount of income tax in April. It has us. My withholding amount for 2009 was $500 less than for 2008. We got money back in 2008. Granted my husband had a salary increase for 2009 but I didn't. Due to this we are going to have to pay $771 in income tax on top of what has already been withheld. I thought I would try doing both of ours separately and on my little bit of income alone it shows me owing $812, while my husband at near double my income would be getting $45 back, wow. What has Obama done now? Made a bigger mess. If he thought this would balance things out it didn't! Talking about not happy. Our itemized deductions are not more than the $11,400 standard deduction! What does one do?

 

[LuciferSam]

Has anyone else done a rough copy of their taxes to find that the federal income tax withholding changes as to withholding less in order for people to have more income on their paychecks is causing them to have to pay a huge amount of income tax in April. It has us. My withholding amount for 2009 was $500 less than for 2008. We got money back in 2008. Granted my husband had a salary increase for 2009 but I didn't. Due to this we are going to have to pay $771 in income tax on top of what has already been withheld. I thought I would try doing both of ours separately and on my little bit of income alone it shows me owing $812, while my husband at near double my income would be getting $45 back, wow. What has Obama done now? Made a bigger mess. If he thought this would balance things out it didn't! Talking about not happy. Our itemized deductions are not more than the $11,400 standard deduction! What does one do?

I see no benefit in getting money back from the IRS, but you can always adjust your withholding, so I wouldn't see this as an issue.

 

[30A Skunkape]

LadyD, you have never gotten 'money back'. You previously 'lent interest free'. This year you actually came out ahead by holding on to some money for a longer period of time and hopefully did something wise with it, like bet on the Saints winning the superbowl.

 

[Matt J]

LadyD, you have never gotten 'money back'. You previously 'lent interest free'. This year you actually came out ahead by holding on to some money for a longer period of time and hopefully did something wise with it, like bet on the Saints winning the superbowl.

My boss is still kicking himself for not taking that 20:1 $200.00 bet several months back.

 

[30ashopper]

LadyD, you have never gotten 'money back'. You previously 'lent interest free'. This year you actually came out ahead by holding on to some money for a longer period of time and hopefully did something wise with it, like bet on the Saints winning the superbowl.

Exactly! Refunds are to be avoided at all costs, you should always come up a little in the hole. Refunds represent money you could have been using or investing the year prior. Owing something means the government gave you a short term loan.

 

[beachmouse]

The decrease in withholding was widely talked about last spring as a way to get more money circulating into a sinking economy without having taxpayers suddenly use the decrease to pay off credit cards, save, or otherwise non-spend it.

 

[flajones]

During presidential campaign and after election, Dems claimed they were lowering taxes for 95% of country. Surprise! As some of us noticed at the time, changing withholding tables is not the same as changing income tax rates. Tax rates were never changed, and congress never intended to. Pure deception-and the people impacted most are those on the edge, who never noticed $5 per week increase in paycheck, but now are stuck with $250 decrease in refund, or taxes owed. Let the buyer beware!

 

[Here4Good]

We will never be able to be the kind of financial-savvy consumers that can force financial institutions to offer safe products as long as most of us still believe that an income tax refund is a good thing.

 

[Lady D]

I see no benefit in getting money back from the IRS, but you can always adjust your withholding, so I wouldn't see this as an issue.

Going to have to, see no way out of this at all.

 

[30A Skunkape]

Wouldn't it be so healthy if witholding was suspended for just one year? Wow, would it be interesting to see what happened when people had to write checks in April