PDA

View Full Version : U.S. Issues Millions will have to repay part of tax credit


Taco John
11-16-2009, 10:13 AM
Millions will have to repay part of tax credit

By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer

WASHINGTON More than 15 million taxpayers could unexpectedly owe taxes when they file their federal returns next spring because the government was too generous with their new Making Work Pay tax credit.

Taxpayers are at risk if they have more than one job, are married and both spouses work, or receive Social Security benefits while also earning taxable wages, according to a report Monday by the Treasury Department's inspector general for tax administration.

The tax credit, which is supposed to pay individuals up to $400 and couples up to $800, was President Barack Obama's signature tax break in the massive stimulus package enacted in February.

Most workers started receiving the credit through small increases in their paychecks in April. The tax credit was made available through new withholding tables issued by the Internal Revenue Service.

The withholding tables, however do not take into account taxpayers with multiple jobs or married couples in which both people work. They also don't take into account Social Security recipients with jobs that provided taxable income.

The Social Security Administration sent out $250 payments to more than 50 million retirees in the spring as part of the economic stimulus package. The payments were meant to provide a boost for people who didn't' qualify for the tax credit.

However, they went to many retirees who also received the credit. Those retirees will have the $250 payment deducted from their tax credit but not until they file their tax returns next year, long after the money may have been spent.

"While implementing a credit through reduced withholding is an effective way to provide economic stimulus evenly throughout the year, it is difficult to account for everyone's circumstances," said J. Russell George, the Treasury inspector general for tax administration. "More than 10 percent of all taxpayers who file individual tax returns for 2009 could owe additional taxes."

The tax credit is also available for 2010. Russell said the problems will continue in 2010 if they are not resolved.

The credit pays workers 6.2 percent of their earned income, up to a maximum of $400 for individuals and $800 for married couples who file jointly. Individuals making more than $95,000 and couples making more than $190,000 are ineligible.

"Making Work Pay was designed to deliver much needed boosts to the paychecks of 95 percent of all working Americans," said Nayyera Haq, a Treasury Department spokeswoman. "Since enactment, more than 110 million families have benefited from as much as $60 in additional take home pay each month to put toward their family budgets, serving as a steady boost to spending and consumption."

For many, the new tax tables will simply mean smaller-than-expected tax refunds next year. The average tax refund this year was about $2,800.

The IRS, in a response to the audit, advised taxpayers to check their withholding throughout the year to make sure they don't get hit with an unexpected tax bill.

"The withholding system must approximate the tax liability of tens of millions of Americans, and therefore, cannot be tailored precisely to fit every individual situation," Richard Byrd Jr., commissioner of the IRS' wage and investments division, wrote in the agency's response to the report.


http://news.yahoo.com/s/ap/20091116/ap_on_bi_ge/us_tax_credit_pickle

memyselfI
11-16-2009, 10:22 AM
oooopsie pooopsie if there ever was one...

RINGLEADER
11-16-2009, 11:06 AM
Another example of progressive government incentivizing the wrong thing.

BIG_DADDY
11-16-2009, 11:14 AM
But, but, butt............

HonestChieffan
11-16-2009, 11:17 AM
Keep in mind its only hard working tax payers who have to refund it back to the government.

The rest of the crowd who didnt pay in get to keep your money.

Calcountry
11-16-2009, 11:17 AM
But, but, butt............My how your avvy's have changed over the years. That's a fine strappin young lad you have there. :) :thumb:

Jenson71
11-16-2009, 11:21 AM
My how your avvy's have changed over the years. That's a fine strappin young lad you have there. :) :thumb:

It's Gilbert Gottfried's son

http://ia.media-imdb.com/images/M/MV5BMTI0MzY4MzMyOF5BMl5BanBnXkFtZTYwMjAzNDE2._V1._SX274_SY400_.jpg

RINGLEADER
11-16-2009, 11:23 AM
Keep in mind its only hard working tax payers who have to refund it back to the government.

The rest of the crowd who didnt pay in get to keep your money.

That was my point.

Like all good liberal/progressives Obama and Co. want to use tax policy (be it income, health care, or whatever else) to punish certain behavior. Hard work being one of them.

You tax something you generally get less of it.

KC native
11-16-2009, 11:25 AM
Yawn, we already had this discussion here. This is old news and people who might be affected about this have been told repeatedly and have had the ability to change their withholdings to what they were before this for months.

HonestChieffan
11-16-2009, 11:30 AM
Changing withholding. Thats how you see this. Amazing.

BIG_DADDY
11-16-2009, 11:31 AM
My how your avvy's have changed over the years. That's a fine strappin young lad you have there. :) :thumb:

Yea he insisted on getting his drivers licence picture taken at the DMV. He had them all howling. He was mad though when they discovered he wasn't 16 and denied him the license. When we left he went up to a big ol Harley and said "ride" about 15 times. He loves motorcycles.

KC native
11-16-2009, 11:32 AM
Changing withholding. Thats how you see this. Amazing.

So do you work? Have you ever filled out a W-2? Ever amended one? It's quite simple. In fact, my company at the time even sent out an e-mail warning people and told them how to change their with holdings.

BIG_DADDY
11-16-2009, 11:33 AM
But, but, butt............

But at least the money we are paying them back with is worth less.

HonestChieffan
11-16-2009, 11:36 AM
So do you work? Have you ever filled out a W-2? Ever amended one? It's quite simple. In fact, my company at the time even sent out an e-mail warning people and told them how to change their with holdings.

No Im homeless and am living on the goodwill of the people. Moron.

You are a moron and prove it time and time again with your posts.

Changing withholding on a W-2 does not change the net you pay to the federal government, it just changes the timing of the grab for the working persons cash. In the end the handouters got your money.

KC native
11-16-2009, 11:38 AM
No Im homeless and am living on the goodwill of the people. Moron.

You are a moron and prove it time and time again with your posts.

Changing withholding on a W-2 does not change the net you pay to the federal government, it just changes the timing of the grab for the working persons cash. In the end the handouters got your money.

:shake: Please try again.

RINGLEADER
11-16-2009, 11:44 AM
Yawn, we already had this discussion here. This is old news and people who might be affected about this have been told repeatedly and have had the ability to change their withholdings to what they were before this for months.

This is what the Dems will say.

Old news.

Impacts very few.

People should have jumped through our hoops earlier.

KC native
11-16-2009, 11:48 AM
This is what the Dems will say.

Old news.

Impacts very few.

People should have jumped through our hoops earlier.

It's not jumping through hoops. I personally thought this was one of the more stupid parts of the stimulus but it is what it is and it's pretty petty that some are trying to make a big deal about it.

HC_Chief
11-16-2009, 11:54 AM
Hilarious. First a "tax rebate" check, now "oh, well, you have to pay that back in taxes".

I guess I was one of the "lucky" ones; I made too much money to qualify for the "tax rebate". I guess I'm just one of those "evil rich people" the libs are always harping on? Funny, I don't feel rich. I still work... a lot. Maybe that's why I made too much money to qualify? :hmmm: Nah! It's because I'm an evil white male (EWM). That's got to be it.

Chief Henry
11-16-2009, 12:17 PM
How cool, finally some of the low income folks have to pay taxes (sarcasm)

BigRedChief
11-16-2009, 02:07 PM
Yawn, we already had this discussion here. This is old news and people who might be affected about this have been told repeatedly and have had the ability to change their withholdings to what they were before this for months.
No chit, this is like the people that didn't realize you had to pay sales tax on the $4,500 for the cash for clunkers money. Idiots that don't do research deserve what they get.

HC_Chief
11-16-2009, 02:09 PM
Ahh, there's nothing like fine print on red tape....

LOCOChief
11-16-2009, 02:15 PM
So do you work? Have you ever filled out a W-2? Ever amended one? It's quite simple. In fact, my company at the time even sent out an e-mail warning people and told them how to change their with holdings.

Dumbass, again you prove that you don't know jack shit.

You don't fill out a W2, you file a W4 and claim your exemptions, and while your right for some it may be a simple exercise it shouldn't have been needed in the first place.

Garcia Bronco
11-16-2009, 05:18 PM
Ahh, there's nothing like fine print on red tape....

Nice...did you coin that?

banyon
11-16-2009, 05:27 PM
This was a bad way to administer tax relief. It was bad on the front side with the surprise extra $13 or whatever, and it's bad on the tail end. A very poorly constructed fiscal stimulus idea.

RNR
11-16-2009, 05:52 PM
Ahh, there's nothing like fine print on red tape....

I will ask you also did you coin that phrase? That is a great line, and one I plan on stealing~

Saul Good
11-16-2009, 07:55 PM
So do you work? Have you ever filled out a W-2? Ever amended one? It's quite simple. In fact, my company at the time even sent out an e-mail warning people and told them how to change their with holdings.

Don't know what a W-2 is, huh? Where can I sign up to pay for your financial advice?

KC native
11-16-2009, 08:39 PM
Don't know what a W-2 is, huh? Where can I sign up to pay for your financial advice?

Hey hey, another one of my leg humpers comes back with nothing of substance again. :rolleyes:

stevieray
11-16-2009, 09:12 PM
So do you work? Have you ever filled out a W-2? Ever amended one? It's quite simple. In fact, my company at the time even sent out an e-mail warning people and told them how to change their with holdings.

with holdings?

headsnap
11-16-2009, 09:14 PM
with holdings?
L OL

Saul Good
11-16-2009, 09:18 PM
with holdings?

He's a financial wizard, stevie. Don't let the fact that he's got a negative net worth, doesn't understand what a w-2 is, and uses the term "with holdings" fool you. Drive up in your Lexus and ask the man in a Kia for financial advice.

vailpass
11-16-2009, 10:26 PM
Dumbass, again you prove that you don't know jack shit.

You don't fill out a W2, you file a W4 and claim your exemptions, and while your right for some it may be a simple exercise it shouldn't have been needed in the first place.


Don't know what a W-2 is, huh? Where can I sign up to pay for your financial advice?


ROFL

alnorth
11-16-2009, 10:48 PM
woops

Guru
11-17-2009, 04:43 AM
Old news. But still complete stupidity on the Government's part.

I was fortunate that my financial planner was all over this as soon as it came out so we were adjusted already to make up for the Government's mistake.

HC_Chief
11-20-2009, 07:52 AM
I will ask you also did you coin that phrase? That is a great line, and one I plan on stealing~

Yep :D
Feel free