The income tax season is here and this year most American taxpayers have a little more cash to help them manage their finances and get their credit card debt paid down. The Making Work Pay tax credit went into effect in the spring of 2009 when tax withholding tables were recalculated to decrease amounts withheld from paychecks by up to $400 for single taxpayers and $800 for couples.
While the tax savings benefit most taxpayers, some people may find that not enough tax is being withheld from their income due to how the Making Work Pay credit is set up. A small percentage may either not receive as large a refund as usual next year and still others may find that they will have to pay more in next year. Among those that should be concerned and keep careful track of their withholding are:
- Those receiving a pension
- Couples with two or more incomes
- Individuals working more than one job
- Those who can be counted as a dependent
- Some Social Security recipients who work
- Those who do not have valid Social Security numbers
If you believe that an insufficient amount is being withheld from your paycheck you can verify this by using a withholding calculator at the Internal Revenue Service web site. If not enough is being withheld the IRS provides the option of submitting a revised Form W-4 (Employee’s Withholding Allowance Cerificate) to ensure that the right amount is being withheld.
For more information about the Making Work Pay credit view the video below.
