bodyThe American Recovery and Reinvestment Act that was signed into law by President Obama back in February included little in the way of immediate, direct relief for consumers. Sure, there is the $8,000 first-time home buyer tax credit. And billions have been set aside for highway construction projects. But those super-targeted funds haven't done much to help millions of struggling Americans make ends meet over the past few months.
The one small victory for taxpayers in this regard came in the form of the Making Work Pay Credit. The credit, essentially an across-the-board $400 cut in the payroll tax, works out to roughly $8 more in the pockets of every working American per week.
The logic behind these measly incremental payouts is that we'll be more likely to spend the extra sum if it comes to us in the form of small, regular payments. Had the government sent us all checks for $400 we'd be much more likely to put them in the bank, hence defeating the purpose of the "stimulus."
Makes sense. And whether it comes to us all at once or little by little, extra cash is extra cash. But there is one tiny catch. And yesterday the IRS published another alert aimed at getting Americans to sidestep a nasty little surprise tied to the new credit.
The bottom line: Your employer could actually be giving you more money than you're entitled to. Due to standardized IRS withholding tables that were updated to take less from all taxpayers, regardless of their individual circumstances (most importantly, marital status), it's possible that you shouldn't be receiving the full extra amount in each check. And what your employer giveth every two weeks… the IRS will eventually taketh away when you file your income-tax return next year.
Married couples with two incomes, individuals with two jobs, taxpayers who can be claimed as a dependent and those receiving pension payments are most vulnerable to this little clerical quirk. According to the IRS, your best course of action to head off a smaller refund or, heaven forbid, a tax-due bill next year: Adjust your withholding.
The good news: Changing your withholding is as simple as completing a new Form W-4 and handing it to your employer. What's more, the IRS offers a publication and worksheet, as well as a calculator that will help you figure your withholding allowance correctly.
For more information from the IRS, check out its resource center for the Making Work Pay Tax Credit. Or sit back, relax, and fire up this entertaining and informative video clip:
body
yeah, sure, that 8 bucks has given me so much more liberty, I can actually afford a "vente" frappacino once a month now, and that big screen tv, that is a sure bet. Seriously, I am one of the lucky ones, I still have a job that can't be outsourced to some 7 yr old in asia, but in all honesty, I am just about to have my own financial revolution, because I have had it. What a bunch of greedy thieves on wall street.
body
How nice! We will get to pay back this pittence with a big tax bill on top of paying for the billions to rescue the poor starving mortgage brokers. We couldn't let them go without their million dollar bonuses and corporate jets just because millions of Americans are loosing their homes and jobs.
The government should have given money to each familiy to pay down their mortgage. Those payments would have gone directly to the banks (that the government was so concerned about!) and we would have had extra cash each month to spend. There is the stimulus!
body
Yeah, I agree with the others, the new-found $8 has been a remarkable stimulus for my family. We need to decide each week just what luxury item we'll be spending it on. Next week I'm hoping to buy gas for our lawnmower.
Last month I had a job working in a Section 8 (government funded) housing project. Each apartment I did work in had a huge widescreen television, high-end audio system and leather living room set; and there were three $40,000+ cars in the resident parking lot. I want to know how a still-married father of one with a great education, good job and spotless credit can get sign-up for these benefits.
In the meantime, neighbors are enjoying the federal benefits of having bought a house they couldn't afford, then further overextending themselves purchasing extravagant furnishings they also cannot afford. Now with their mortgage "misunderstanding" largely forgiven, and their credit crisis countered, they sleep soundly every night, while I still get to worry about paying my mortgage, taxes and insurance on my own. Nothing like being punished for never having made an error in judgement.
I don't know what the solution to the problem is, but I can tell you that giving my money to someone else so they can buy a 60" television is getting old fast.
body
I totally agree...what I want to know is how are they able to afford all those nice things and still qualify for government housing? I would like to think that the government isn't paying for all of that. They have to have some kind of jobs to pay for that stuff. They are lying on their housing applications and no one cares! We are trying to have the american dream..the honest way and when things get tight, no one really wants to give us a helping hand. Meanwhile, they are sitting in their section 8 apartments, with their tricked out cars, paying probably $50 a month in rent, living the high life. What is the government thinking. When my grandparents were living they could barely get food stamps. Nowadays, you have 20 year olds with 3 or 4 kids that get between $400 and $500 a month for foodstamps and they refuse to work! On top of that, they get welfare checks so that they can buy those big screen tv's. Don't get me wrong, I know that there are people who are receiving benefits that definitely need them but I think that there are a lot more of them that actually don't and they are beating the system. It's just so frustrating that the government won't take the time to actually look into these things.
body
Want-four-rings hits the nail on the head. I read his post and said "wow, that's exactly how my husband and I feel. Where is our reward for being a responsible, contributing, honest member of society? The old saying, "the rich get richer, the poor get poorer" no longer holds true, to some extent. What about "the rich are still getting richer, the poor are not getting any poorer, and the middle guy is still getting screwed." Who's watching out for us? We're the ones who have always paid more than our share, where's our break???
body
I am a nurse and the other day we had a student nurse come to our clinic as part of her course work. I and another nurse were chatting with her when she started bragging about how she had 3 kids but wasn't married to their father. They all lived in a house the state paid for while he worked and she went to school. She got her tuition paid for, her day-care paid for, plus food stamps and wick. She said, "Why get married when you can get all this for free?"
My friend and I stood there with are jaws hanging open. My friend finally said, "Well, thank you for letting us know where our tax dollars are going." This young gal actually said, "Sure, no problem." She didn't even get it.
My husband and I were both out on our own at 17. We both went to school while working to pay our tuition. No one helped us. He went on to medical school while I raised our children and worked to pay his tuition and we borrowed. No one helped us. We are still, 13 years later, paying off student loans. We are a middle class family with 3 kids to get through college. My husband works very long hours because they are always short of physicians. We live a very simple lifestyle and save as much money as we can so we can pay for our kids college. Now Obama wants to take our money and give it to people like this student nurse who is living with her boyfriend having kids and riding the system. How fair is that?
I hate socialism because it penalizes the person who is working hard. At least with government health care, when the system runs out of money half way through the fiscal year like it does in Canada, he can finally have some time off.
body
All these comments are right on. However, we are complaining on this blog and maybe we are not complaining to the right people. I was a single mother of 2 boys when my husband left and ended up in prison. We lived in an attic apartment and I worked and made enough money to pay the rent and buy food. Luckily my family helped with shoes and a few "extras". I never got food stamps or any other help from the government. I went back to school after work and found a better job. I worked very hard and was promoted and continue to work hard. I was able to purchase a small home and have tried to save money for retirement. I have been working since I was 15 and think I deserve to retire. We don't have a big screen TV or fancy cars but we are happy because we are not in debt. However, I am furious that my taxes are putting steaks and other fine things in the homes of those who refuse to work. It is our fault in a way because we have enabled them to not work. If everyone would take responsibility for their own lives and those of their children (and yes, that means working hard...sorry folks), we would all be a lot better off. I do contribute to food pantries and to animal shelters and to veterans. Now these lazy people who abuse the system should be taken to task. NOW.
body
Its great to hear all of the outrage against whats going on with taxpayer money but complaining on these blogs won't change a thing. Its time to stop the problem at its source .....the taxpayer needs to demand accountability or withhold their taxes from the corrupt government and its entitled citizens. How about a new grass roots organization that demands change that wields power similar to a large union. The union would represent hard working honest taxpayers just like the lobbyists represent special interest groups. Just a dream or is it possible?
body
I think you've totally hit the nail on the head with people not getting it. My brother's girlfriend called off their wedding last month 2 weeks prior because her mother told her all the stuff she can "get for free" if she's a single mother. So when the baby is born later this month, the girl and her mother plan on saying they don't know who the father is, get Section 8, have the state pay for the mother to watch the baby, get $300 a month in food stamps and then my brother is going to "secretly live with them". I've had enough of this and told them both if I find out they go through with this ill concieved plan, I'm turning all of them in. I think if you're on Section 8, you should have to provide monthly copies of your paystub to prove your income has not changed and have a monthly, unannouced inspection to show that other people who aren't supposed to be living there are not. I also think that in order for you to get food stamps and WIC (or any goverment benifits for not working or not wanting to work) you should have to pass a drug test. Show us you're not smoking or sniffing your money away and then we'll help you out.
The American Recovery and Reinvestment Act that was signed into law by President Obama back in February included little in the way of immediate, direct relief for consumers. Sure, there is the $8,000 first-time home buyer tax credit. And billions have been set aside for highway construction projects. But those super-targeted funds haven't done much to help millions of struggling Americans make ends meet over the past few months.
