A surprise tax payable because of the stimulus package?
You might want to check your work if you think you’ve planned correctly for the reduced withholding instituted via the “Making Work Pay Credit” of Obama’s stimulus package in February.
MWPC was implemented using new income tax withholding tables. However, the changes to the withholding tables did not take into consideration the dependents who receive wages; single taxpayers with more than one job; and joint filers where one or both spouses have more than one job or both spouses work.
The IRS worked assiduously to address those cases, but did not eliminate the potential for some taxpayers to be surprised they did not withhold enough.
If you think this applies to you, see a tax preparer now or buy a preliminary copy of tax software to plan now for your 2009 tax bill.
There is one bright spot in this situation: the IRS says they will waive penalties if you underpaid withholding due to the above gaps in the tables.
Mike Dayoub is a tax preparer and financial planner in North Fulton, Georgia. 770 361-3139 website
