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New IRS withholding rates fatten paychecks — a little
TweetBy Jon Moffett
Rather than a lump sum, workers will see an extra $8-$15 per paycheck.
YOUNGSTOWN — That extra few bucks in your latest paycheck was not a mistake.
The Internal Revenue Service implemented a “Making Work Pay” tax credit as part of the stimulus legislation. By April 1, employers were required to deduct less taxes from workers’ pay. The new laws impact about 110 million working families, including 4.5 million Ohio households and averages between $8 and $15 per paycheck.
“This is a result of the IRS adjusting the withholding tables,” said Eric Erickson, IRS spokesman for Ohio and West Virginia. “People are going to have less money withheld and more money in their paychecks.”
The tables are posted on the organization’s Web site, IRS.gov. The tax cuts are determined by marital status and pay frequency and rate. The credit allows up to $400 for a single worker or $800 for a married couple this year.
What people are doing with the money varies.
“I threw money back into my retirement account because now is the time to buy,” said Patricia Dugan, a legal aide in Youngstown. She added that a lump sum would’ve been a better option because it would have given people a chance to better stimulate the economy.
“It’s going to let people purchase things at the grocery store, but it won’t go toward any big-ticket purchases.”
The preference for a lump sum seems to be a popular stance. Mike Golubic, 58, of Canfield, said he’d have used the money for home improvements had he received a lump sum. He added that the extra cash will help but not dramatically.
“It’s nice to get a little more money, but it’s not going to change my lifestyle,” he said.
Gloria Harris, 33, and Jada Wright, 43, work for a management company in the city. They said they will hardly notice the increase.
“It’s a ‘Catch 22,’” Harris said. “Everything kind of equals out because the price of everything is going up.”
Wright agreed, saying, “It’s not even going to mean anything for me. I won’t see it.”
Some people might have used a lump sum payment to buy larger items, she added.
Erickson said some workers are unaware of the change because they don’t have to do anything to get the extra money. He added that there hasn’t been much uproar about the changes because people still have their attention focused on filing their 2008 income taxes due April 15.
“I haven’t heard a lot internally [on] how it has impacted our calls ... because it doesn’t impact their filings right now,” he said. “I just don’t think people are as concerned with it right now.”
Erickson said that the people who have a second job to supplement income may need to take action. He said those workers must make sure their employers take out the appropriate money for taxes owed.
U.S. Sen. Sherrod Brown, D-Ohio, issued a statement about the legislation, calling it necessary.
“This tax relief is long overdue for middle class families in Ohio,” Brown said in the statement. “For too long, working families saw their wages stagnate and their monthly costs explode ... President Obama’s ‘Making Work Pay’ tax cut will help family budgets that have been stretched thin.”
jmoffett@vindy.com
Comments
And at the end of the year, people are going to be crying because they either won't get much of a tax return, or worse yet, they'll have to owe.
~ it's not a "lump-sum" stimulus this time around because = this is YOUR money to begin with, you are just getting it sooner ~ rather than LATER when you file your taxes. If you always got some $$ back ~~ you will indeed recieve this much LESS. Your with-holdings was automatically changed. Last time around the LUMP-SUM $$ was actually EXTRA given to you!! This time around ~~ it is not EXTRA $$
~ if you usually owe at the end of year~~ you will owe this much more ;-<
Wow! In the recent bad times preceding the IRS change, I was eating oatmeal and HALF a banana for breakfast. Now, I can get back to eating oatmeal and a WHOLE banana for breakfast.
Please be aware that since you are getting less federal withholdings taken from your earnings, you will see a difference on your next years tax return. If you usually get a refund, your refund may be less and if you usually have to pay, you may have to pay even more. Best solution is to reconsider your withholding allowances. So for now you are putting more money in your pocket to help boost the economy today, but be aware of how it will affect next years tax return. This is one that I will be following on the irs.gov website.
Well put suzann ~~
that's exactly what I was trying to relay to all. You have worded it better!! THANKS ;->
We need a flat tax this would get rid of the IRS and we would be paying less than half of what we are paying now.
As far as I'm concerned they can have the chump change for they will want it back at the end of the year anyhow. Then they will tell you that a tax increase is needed to make up for their stimulus plan.
Our government considers everyone with a paycheck as being rich. Yep, they will only tax the rich!
MORE GOVERNMENT
http://i43.tinypic.com/2pspwmq.jpg
Isn't it great how last year Bush's stimulus check was chastized by the democrats as being inconcequential. I think even our dear senator Brown made fun of it. Yet here he is saying how a $10 a week increase in take home is "badly needed" LMAO
I agree with most all of you here, not only will we be paying it back at the end of the year but BO will raise our taxes even more. Don't forget that they also plan to let the Bush tax cuts expire because we (the gov't.) need the money.
Let's see,
306 Million people in the US and we have already pledged...let's make it simple.... 3 TRILLION dollars to the bailout.
so if 1 trillion is a 1000 billion............
and 1 billion is a thousand million.........
every man woman and child in the US who is a LEGAL resident could get a check for........
Wait for it..........
$98 Million dollars
Now THAT is a stimulus check!
You may want to rerun that calculation!
Now if you divided up that 3 Trillion by the number of taxpayers who actually pay in more than they get back ~60 million taxpayers at the most you end up with $50,000 each. I can deal with that. Of course I am retired and none of my income is earned income so I do not get the big tax cut!
BO is getting even with me cause I didn't vote for him!
Please be patient, this is only just the beginning. Our country is in a whole lot of trouble, and the new president will not fix this problem today as which I am sure most of you ... all ready know that!
"the new president will not fix this problem"
Nor any other problem that develops. He still hasn't gotten over the shock of making it to the White House for four years.
Be patient? This isn't the beginning. This has been going on for years. It's just now starting to get bad. It may not be Obama's fault, but he's definitely not helping with his empty promises and so-called brilliant ideas. And congress isn't making it any easier.
None of this should have ever happened to begin with and it sure shouldn't have gone on for this long.
The stock market has gained ground for the past five weeks in a row but keep looking for that black cloud inside the silver lining.
Nothing is without a hitch, depending on your perspective. Get a little now, get less later. It is our money that the government is giving back a little sooner, but will not give us next year on our taxes. That works for me. I can invest it now and get a better return than the government, anyway.
As for those of you complaining about how it's not enough, I suggest lowering your personal out-go each month. Cutting back on going out to eat even just one time a month is worth as much as any money from the government back in your pocket.
Mine is going to pay the increased property taxes in Boardman!
clarkkent:
Since your post is the one that follows mine and you stated "you're probably one of the ones that have been foreclosed on," Were you referring to me?
I have already gone in and made changes in my W-4 tax withholdings to have the same amount taken out in federal taxes as before. I have a feeling a lot of people are going to be crying the blues 04/15/10.
I am going to send the extra money, from my paycheck, to the N.R.A. to combat the administrations policy of banning personal ownership of firearms. Funny isn't it? Using the money Obama gives me to fight his agenda.
I stopped at Arbys for lunch and there went the extra chump change.
I make sure that I owe a couple hundred at the end of the year. They don't get any extra money from me cause they do not pay interest on refunds.
Here is a article that will help you understand the problems of this new with-holding
copy & then paste on subject line
http://finance.yahoo.com/news/INSIDE-...
just click on the above^^ or below
http://finance.yahoo.com/news/INSIDE-...