Back in February when we were all scrambling to get our tax paperwork in order so we could file away, the IRS issued revised withholding tables based on the "Making Work Pay Tax Credit". This means more people will have less Federal tax withheld than they expected.
Since your employer uses these tables regardless of your ability to take advantage of the "Making Work Pay Tax Credit" you may owe more taxes next year or if you're lucky just get a smaller refund than expected.
As a general rule, the following people are more likely to be adversely affected by the withholding tax table adjustment:
- Taxpayers filing jointly with their spouse and both spouses work
- Taxpayers with multiple jobs
- Taxpayers who are collecting Social Security and also have a job
- Taxpayers who intentionally over withhold their taxes as a savings device (which I highly recommend not doing).
- Taxpayers who received an Economic Recovery Payment
In order to avoid any surprises in April 2010, I highly recommend that every taxpayer review their tax situation as soon as possible and make any necessary adjustments in your withholding and/or estimated tax payments.
Best wishes,
Gina
http://GLGcpa.com
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