Millions Of Taxpayers Owe After IRS Mistake
Tax Credit Pickle
More than 15 million taxpayers may owe $250 or more because of how the IRS set up a tax break that was designed to help consumers spend the U.S. economy out of recession.
NBC 4
More than 15 million taxpayers may owe $250 or more because of how the IRS set up a tax break that was designed to help consumers spend the U.S. economy out of recession.
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WASHINGTON—A tax break designed to put more money in your pocket could end up costing you.
President Barack Obama’s Making Work Pay tax break was part of the stimulus package enacted back in February. The tax break was designed to help consumers spend the U.S. economy out of recession.
NBC 4 reported with the FAST FACTS on what you need to know.
The tax break increased paychecks for 95 percent of working families, but an IRS mistake means more than 15 million taxpayers could owe the government $250 or more.
Experts said the IRS made mistakes in the new tax withholding tables.
The U.S. Treasury Department said the affected groups include:
- Individuals with more than one job.
- Married couples in which both spouses work.
- Employees claimed as dependents on their parents’ tax return.
- Social Security recipients who also earn taxable wages.
Expect either a smaller refund check or to owe the government, Floyd Business Consulting CPA Jeff Ballmer said.
“The best thing to do would be go to the IRS and check out their tax withholding calculator and figure out where you sit,“ Ballmer said.
The tax credit is good through 2010.
Ballmer says be prepared for next year by increasing your tax withholding on your W-4 form.
“Claim less exemptions. If you typically claim two, lower it down to one or zero. Or, you could also make quarterly estimate tax payments where you just write a check to the government to cover any tax you might owe,“ Ballmer said.
If you’re really worried about your withholding for this year, Ballmer said there’s still enough time to adjust for your December paychecks.
For additional information, stay with NBC 4 and refresh nbc4i.com—Where Accuracy Matters.
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