Just Labradors banner

1 - 10 of 10 Posts

·
Registered
Joined
·
1,639 Posts
Discussion Starter #1
As I understand it my next pay check will be larger because they will withhold less income tax letting every individual keep an extra $400 for the year. What I didn't hear is that they have changed the tax rate. So all that will happen is next year when you do your taxes your withholding will be $400 less and if you are use to getting a refund it will be $400 less. If you even out every year, next year you will have to pay $400. If you usually owe, you will owe $400 more.
You will still owe the same amount of taxes.
Is that your understanding?
 

·
Registered
Joined
·
10,664 Posts
It's my understanding that it is a tax credit. It can be taken by the reduced payroll witholding or by tax credit on your 2009 and 2010 returns.

Like any good government plan you'll pay for that credit somewhere else. Besides 800 bucks divided by 52 weeks is about 15 dollars a week extra for a two wage earners. 15 bucks isn't enough for the average family to stimulate the economy. What does that get a gallon of milk,a loaf of bread and some eggs? great we now have the French toast stimulus plan.
 

·
Registered
Joined
·
3,915 Posts
I'll admit, I haven't fully read up on it, but at first glance I think it's as Labs4life described. It's a credit that will be applied, just like your withholdings would have counted as a credit. Your employer will reduce your withholdings so that you don't get a bigger refund, so all things held the same, I don't think it will effect your tax liability at the end of the year. At least that's how I read it.
 

·
Registered
Joined
·
10,307 Posts
It is a tax credit as has been stated. The withholding is being reduced to near match the credit. So your refund or bill next year willbe about the same. But you have had that extra $10 a week to spend.

The logic, if you buy into it.
If they send you a check for the full credit now, (1) The government has to print the money now, (2) You will either put the money in the bank, for when you lose your job or whatever, or will put it towards your credit card bill. (Neither stimulates the economy.
If they dribble it at you as in $10 a week. You will spend it. The place you spend it at will spend it, and so on. You won't miss it, you won't even know you had it. It gets into the system that much faster.
 

·
Registered
Joined
·
6,548 Posts
Here's what I don't get - my check went up about that much LAST month. Did our payroll provider jump the gun?
 

·
Registered
Joined
·
167 Posts
Here's what I don't get - my check went up about that much LAST month. Did our payroll provider jump the gun?
I handle payroll for our company. The new tax table has been available for about a month. Companies were encouraged to implement it as soon as possible, but no later than April 1st, so some companies may have done it sooner.

Yes, it is a credit. It is reducing the amount you owe for the year. But instead of waiting until people filed there returns, which is how these are usually handled, they rolled out this plan to get money in people's pockets sooner, without sending out checks the way the Bush admin did.
 

·
Registered
Joined
·
4,486 Posts
yes, melissa; they said some would see it by april 1...i saw mine jump this past month and yes, it is around $10/week. i dumped mine back into my 401K! :)
 
1 - 10 of 10 Posts
Top