Have you heard of this Stimulus Bonus?President Obama has asked that all employers adjust their payroll systems by Wednesday so eligible workers can start receiving the new Making Work Pay tax credit through their paychecks. The credit, available for 2009 and 2010, was a part of the economic recovery package lawmakers passed in February.
Possibly. Some people could end up getting a larger credit than they're entitled to. That means they'd have to pay back the excess amount when they file their 2009 taxes -- or, if they're getting a refund, their refund would be reduced by the amount they were overpaid.
If that situation is unappealing, a tax filer could act now to reduce the number of withholding allowances he takes on his W4 at work. The fewer allowances he takes, the more tax that is withheld.
Those most likely to be overpaid are:
- Anyone who holds more than one job.
- Joint filers whose spouses work.
There's a twist, too. Because of the way the withholding tables were set up, each working spouse may be paid up to $600 this year -- instead of up to the $800, Mezistrano said.
In other words, the husband would receive $600 at his job and the wife $600 at her job, for a total of $1,200. Since they're only entitled to $800 total as a couple, that means they would have to pay $400 back to the IRS -- or see their refund reduced by that amount.
- Anyone who receives income from a rental property or investment, such as interest and dividends.
- Anyone who started receiving their credit at the end of February or anytime in March.
You should really look at this and get your self sorted out before you come up short next year when you go to look at your taxes. The government is going to "let you keep more of your money". I remember the Republicans had a plan to do this back in the 80s and 90s. It never passed because "it was stupid and irresponsible" to let the American public spend their own money.So back on track, you get to keep more of your paycheck, BUT they may let you keep TOO MUCH of your check which would cause you to come up short next year.
This last paragraph applies to my situation at work.Conversely, if your employer doesn't start your payments until the end of April or in May -- there's no penalty if an employer doesn't meet the April 1 deadline -- you may end up getting a little less of a credit than you're entitled to, in which case you can claim the rest when you file your 2009 tax return.
I wish I understood the smoke and mirrors of the tax code better. I don't like it when they jack with my current (imposed by the wife) system that ensures we get a big return every year. Which is kinda silly, but it's better than having to pay, I guess.