-
Review your W4
Millions of taxpayers started taking home more money in their paychecks this past April thanks to the Making Work Pay tax credit. However, changes to the IRS withholding tables cannot take into account single workers with multiple jobs, or dual-income married couples, for example. Therefore, the reduced withholding may cause a smaller refund or a larger balance due next year.
Those who could be negatively affected include:
- Married couples who both work
- Individuals with multiple jobs
- Retirees who have taxes withheld from a pension or Social Security benefits
- Taxpayers who work but are dependents of another taxpayer
What to do?
You should review and adjust (if necessary) your W-4 to ensure that you are withholding the correct amount. There are calculators such as http://www.hrblock.com/taxes/tax_cal.../paycheck.html that will help. Otherwise, go see your tax accountant.
HTH
Z
-
Re: Review your W4
^^^ and while you're at it, you should also check and see if your state has enacted an increase in income tax rates and/or reduced allowable tax credits and deductions - and increase your withholding for state income tax payments at the same time ! Unfortunately, many of these state income tax increases have been implemented without a lot of publicity, so you'll have to do some searching to find out if your own state has implemented an income tax increase and whether / how much that increase will affect your own financial situation ( all the more reason to go see your tax accountant if you have one ! )
The following example applies to Californians ...
(snip)"For singles, the top tax threshold has dropped from $47,055 to $46,349. This year, a single filer without children who earned $30,000 in 2008 and 2009 would pay 13.8% more: $617 instead of $542. The standard deduction for sole filers will fall by $55."(snip)
-
Re: Review your W4
In their greed to enact new higher tax rates, most states have updated their withholding tables. That accelerates the flow of new tax money into state coffers. Never the less, it pays to pay attention to your individual state's changed tax rates.