Stimulus withholding.

-
The following link in IRS notice 1036 in PDF format. This is the revised withholding tables that is in effect from the stimulus bill just signed by Pres Obama.
http://www.irs.gov/pub/irs-pdf/n1036.pdf

This means most taxpayers will start seeing a bigger paycheck as soon as this spring.Eligible workers will get the benefit of this change without any action on their part. This means that workers don’t need to fill out a new W-4 withholding form to get the Making Work Pay credit reflected in their take-home pay. A Form W-4 will not need to be submitted for the automatic withholding change. Individuals and couples with multiple jobs may want to submit revised Form W-4 forms to ensure enough withholding is held to cover the tax for the combined income. Publication 919 provides additional guidance for tax withholding.

For many taxpayers wondering what the Making Work Pay Credit is, its a part of the new stimulus package. Basically,
For 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing joint returns.

This tax credit will be calculated at a rate of 6.2% of earned income and will phase out for taxpayers with adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.

For people who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes in early spring. These changes may result in an increase in take-home pay. The amount of the credit must be reported on the employee's 2009 income tax return filed in 2010. Taxpayers who do not have taxes withheld by an employer during the year can also claim the credit on their 2009 tax return.

Though all eligible taxpayers will need to claim the credit when they file their 2009 income tax return next year, the benefit will generally be spread out over the paychecks they receive beginning this spring and continue until the end of the year.

Many higher-income taxpayers will see little or no change in their take-home pay. That’s because the Making Work Pay credit is phased out for a married couple filing a joint return whose modified adjusted gross income (AGI) is between $150,000 and $190,000 and other taxpayers whose modified AGI is between $75,000 and $95,000.

Taxpayers will not get a separate, special check mailed to them from the IRS like last year’s economic stimulus payment.

For more detailed info visit IRS.GOV or see an accountant or a tax specialist.

Comments

Post a Comment

Popular posts from this blog

Employee Business Expenses

-
If you itemize deductions and are an employee, you may be able to deduct certain work-related expenses. The IRS has put together the following facts to help you determine which expenses may be deducted as an employee business expense. Expenses that qualify for an itemized deduction include: Business travel away from home Business use of car Business meals and entertainment Travel Use of your home Education Supplies Tools Miscellaneous expenses You must keep records to prove the business expenses you deduct. For general information on recordkeeping, see IRS Publication 552, Recordkeeping for Individuals available on the IRS website , http://www.irs.gov , or by calling 800-829-3676 . If your employer reimburses you under an accountable plan, you do not include the payments in your gross income, and you may not deduct any of the reimbursed amounts. ...
Read more

If you must amend a return, The IRS wants you to know....

-
Top Ten Facts about Amended Returns Taxpayers who need to make a change or adjustment on a return they already filed can do so by filing an amended return. Here are the top 10 things every taxpayer should know about amending your federal tax return. 1. Taxpayers needing to amend their return use Form 1040X, Amended U.S. Individual Income Tax Return. 2. Taxpayers can use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ. The 1040X can also be used to correct a return filed electronically. 3. Taxpayers should file an amended return if they discover any of the following items were reported incorrectly: filing status, dependents, total income, deductions or credits. 4. Generally, you do not need to file an amended return for math errors as the IRS will be ale to make the correction for you. 5. You also do not usually need to file an amended return because you forgot to include forms – such as W-2s or schedules – when you filed; the IRS normally requests thos...
Read more

Vamos A Cuba

-
WASHINGTON — In a measured break with a half-century of U.S. policy toward communist Cuba, the Obama administration lifted restrictions Monday on Cuban-Americans who want to travel and send money to their island homeland. In a further gesture of openness, U.S. telecommunications firms were freed to seek business there, too. But the broader U.S. trade embargo remained in place. The White House portrayed its changes, which fulfilled one of President Barack Obama's campaign promises, as a path to promoting personal freedom in one of the few remaining communist nations. They also marked another major step away from the foreign policy priorities of the Bush administration. But the moves fell far short of the more drastic policy adjustments that some _ including Republican Sen. Richard Lugar _ have argued are required to promote U.S. interests in Latin America and to bring about change in Cuba. For most Americans, Cuba remains the only country in the world their government prohibits them...
Read more