my words IRS messed up. let them cover it
Will You have to Pay Back the Tax Credit?
Many taxpayers were thrilled when President Obama announced that part of the stimulus package was to be in the form of more money in each paycheck. Some of those taxpayers may not be quite so thrilled come next tax season. It seems there is a glitch in the IRS system that is causing many taxpayers to get more money than the tax credit allows. This means that the additional funds that are received will have to be repaid to the government during next year’s filings.
Not everyone is at risk to receive more than their fair share and then have to pay it back. It is mainly those married couples where both spouses work, workers with more than one job or retirees with additional income coming from jobs.
The problem is in the tax tables. The government has issued new tax tables that could mean a nasty surprise at the end of the year for many. The best advice for everyone is to review federal withholding based on the new tax tables to be sure that enough money is being taken out to cover expected taxes. The good news is that the IRS does offer a calculator to help you determine how much you need to withhold each paycheck to be sure you are not shocked by a big tax bill at the end of the year.