Stimulus passed - How does it affect us?

[brerrabbit]

The benifit does not come per paycheck necessarily. I am always amazed that even very smart people don't quite get it when it comes to Federal Income taxes. You have money deducted every paycheck for taxes but you can change that by simply changing your witholdings on your W-4 anytime you want. Less deductions you claim on W-4 more money they withold. More deductions you claim less they withold. By April 15th of the year following you calculate your tax owed by doing your tax return based on year end numbers and calculte your actual tax liability. At this point you claim your tax credit $400 for single filers $800 for married couples. It reduces your tax obligation by this amount. You then compare what you owe (from doing your return) to what you put in during the year (your estimate) if you estimate to much you get money back, if you estimate to little (took more as you went) then you owe money. So when you see something that says you will get $x a paycheck they are just taking the tax credit and dividing it by usually 24 (two paychecks a month for a year) and throwing a number out there.

Now I know that you should fill out your W-4 with the right numbers and if you underpay by more than 10% of your tax bill during the year you can be penalized but the reality is you can manipulate your take home pay by playing around with your W-4 so the only number that really counts is what is the tax credit you get to stick on the tax return at the end of the year.

This stuff was a whole lot easier to handle back years ago when they first started the Federal Income Tax program because you did not pay anything thill the end of the year. You would calculate what you owed and send in the money. To many people were stiffing the IRS so they instituted the deduction method from each check.

 

[FINFAN]

Stinks for people who only get paid once a month.

welcome to my world. Anyone have any more salt for the wound?( and I know it is not LITERALLY by paycheck)
You know, I am just hoping that during these challenging times, everyone who has not lived within their means does so from here on out.I am independent who leans toward Republican, but mostly I am an American and I just would REALLY, REALLY like my kids to be safe and not poverty stricken in the country their Grandfather fought so hard for.

 

[minnie61650]

I thought this started beginning in June

You are correct.


It would begin showing up in most workers' paychecks in June as an extra $13 a week in take-home pay, falling to about $8 a week next January.

Meltdown 101: Highlights of economic stimulus plan


<SNIP>

Q: What are some of the tax breaks in the bill?

A: It includes Obama's signature "Making Work Pay" tax credit for 95 percent of workers, though negotiators agreed to trim the credit to $400 a year instead of $500 — or $800 for married couples, cut from Obama's original proposal of $1,000. It would begin showing up in most workers' paychecks in June as an extra $13 a week in take-home pay, falling to about $8 a week next January.

There is also a $70 billion, one-year fix for the alternative minimum tax. The fix would save some 20 million mainly upper-middle-income taxpayers about $2,000 in taxes for 2009. <SNIP>

Link to full article:

http://news.yahoo.com/s/ap/20090211/ap_on_bi_ge/meltdown101_stimulus_plan_2

 

[Free4Life11]

So let me get this straight, it takes 4 months to update some simple witholding tables? What is the freaking hold up?

 

[dolphindan1]

This doesnt stimulate me one bit....I would rather have the Bush Checks...

 

[Olaf]

This stuff was a whole lot easier to handle back years ago when they first started the Federal Income Tax program because you did not pay anything thill the end of the year. You would calculate what you owed and send in the money. To many people were stiffing the IRS so they instituted the deduction method from each check.

If we had to send in a check, people would realize just how much money Uncle Sam is taking from them every paycheck.

 

[frisco]

This doesnt stimulate me one bit....I would rather have the Bush Checks...

My thoughts exactly.

Now don't get me wrong....I'm not complaining about the extra $13 in my paycheck, but really, what's the point? How is that supposed to situmlate the economy?

I guess my point being, why even bother?

 

[hentob]

It's $400 per taxpayer....

Not all taxpayers. Some taxpayers will have to fund it, but won't get a dime back

 

[Cheshire Figment]

Here is a link to the IRS Release which gives some tax information. More important, at the bottom of that document is a link to the Congressional Conference Committee pdf file which explains all of the provisions in simple (not accounting/legal) language. It is an excellent summary of the bill.

 

[FINFAN]

our news (Illinois) said that aout 140,000 jobs will be saved or created by this, ...basiaclly balancing out the 150,000 they expect to disappear this year...only problem? the 100,000 losses that occured prior to that. I think 'stimulus' is maybe not the best word for the package. And b4 I get jumped on for the Bush years for putting us in this mess, a LOT of the $ we are in debt for was used for natural disaster situations...3-4 years ago things were improving and on a positive upswing. Neither President's plans are/were working for the country recently, but geez, when it is really not going to help any more than the last few years, just admit it, instead of racing into a very unstable plan. I just feel invisible, that the 2 parties are so h-bent on "I'm better" that the innocent people of this country are just casualties. It's all very demoralizing to say the least.

 

[FINFAN]

Here is a link to the IRS Release which gives some tax information. More important, at the bottom of that document is a link to the Congressional Conference Committee pdf file which explains all of the provisions in simple (not accounting/legal) language. It is an excellent summary of the bill.

thanks for the link Figment

 

[minnie61650]

If we had to send in a check, people would realize just how much money Uncle Sam is taking from them every paycheck.

DH is self employed (owns his own business) we pay estimated income tax. Each year we have to estimate the income for the following year. We pay one forth of total of the the estimated tax amount every three months. YES, we do pay a lot in taxes. We never recieve tax rufunds either because if we overpaid the extra amount is put toward the first installment of the next years estimated tax.