Creating Wealth for my Family and Friends
Are You Withholding Enough for This Year's Taxes?
Based on the "Making Work Pay" tax credit, employers now use new withholding tables to lower the amount of tax that is withheld from eligible workers' paychecks.
That means, you're probably receiving more money in each paycheck–up to $400 more per year if you are single and up to $800 more if you file jointly. While this sounds like a benefit, you need to make sure you don't end up paying in at the end of the year because you aren't withholding enough due to this rule.
What Should You Do?
First...take note of when your company starts paying. The new withholding tables were structured to start in April. If your employer started that month, then your paychecks will likely equal the appropriate amounts by the end of the year. However, if your payments started in February or March, you may receive a bit more than you were due. And if your payments start later in the year and you receive less than you are entitled to, you can claim the difference on your 2009 tax return.
Second...double-check your unique situation and withholdings to make sure you're not a risk. The IRS makes it easy with an online Withholding Calculator available at http://www.irs.gov/individuals/article/0,,id=96196,00.html. This convenient online tool now reflects the new withholding tables created by the "Making Work Pay" tax credit.
That means, you're probably receiving more money in each paycheck–up to $400 more per year if you are single and up to $800 more if you file jointly. While this sounds like a benefit, you need to make sure you don't end up paying in at the end of the year because you aren't withholding enough due to this rule.
What Should You Do?
First...take note of when your company starts paying. The new withholding tables were structured to start in April. If your employer started that month, then your paychecks will likely equal the appropriate amounts by the end of the year. However, if your payments started in February or March, you may receive a bit more than you were due. And if your payments start later in the year and you receive less than you are entitled to, you can claim the difference on your 2009 tax return.
Second...double-check your unique situation and withholdings to make sure you're not a risk. The IRS makes it easy with an online Withholding Calculator available at http://www.irs.gov/individuals/article/0,,id=96196,00.html. This convenient online tool now reflects the new withholding tables created by the "Making Work Pay" tax credit.
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