My office manager has notified us that the stimulus package result of us getting $13-14 back will be then taken back from us in taxes next year. She suggested we fill out a new W4 and request that money not be put in our take home pay. My friend who helps me with money questions has not heard about this at all. Does anyone have any thoughts?
By Sandy63 from Baltimore, MD
I think she is wrong from information I find on the internet. You can use google or some other source.
Officials estimated it would mean about $13 a week more in people's paychecks this year when withholding tables are adjusted in late spring. Next year, the measure could yield workers about $8 a week. Critics say that's unlikely to do much to boost consumption.
"The most highly touted tax cut in the original proposal now translates into $7.70 a week for middle-class workers," said Senate GOP Leader Mitch McConnell of Kentucky.
Millions of people receiving Social Security benefits would get a one-time payment of $250 under the agreement, along with veterans receiving pensions, and poor people receiving Supplemental Security Income payments.
They are reducing your withholding. Personally, I have changed my W-4 so they take what they had been deducting previously. Supposedly your deductions are supposed to change at the end of the year (ie: earned income credit, child care credit,etc), but I don't know by how much. I don't want to pay anything at the end of the year, so better safe than sorry. I lived without 9 extra dollars all this time, so it won't make a difference to me.
The way I understand it is that you are getting a bit more money now but you are still going to have to pay taxes on what you earn.
Most taxpayer will qualify for a refundable credit of 400 which is suppose to make up for the lack of federal taxes being withheld.
I've had addition withholding held from my paycheck, but that has more to do with the credits I will lose next year.
If you had to pay federal taxes this season when you filed, you might want to have more withheld.
W-4 change is all that you need to change the amount.
You don't have to change the way your federal taxes is withheld (married, single, etc), you can have an additional amount withheld (line 6 on W-4, such as $10 or $20 per paycheck) depending on how often you get paid.
Hope this helps!
Wait to see what the stimulus package ends up being you can change your status any time. You want to SEE as proof what things are or not before changing. Another thing, if you don't get a yearly update what your SS benefits will be at age such and such, check their website (REMEMBER .GOV) and get one sent to you. My son finally paid attention to his and discovered hardly anything of the last 2 years had been paid into by his boss, but had been taken from his checks. Illegal move!
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