WITHHOLDINGS DECREASE BUT PROCESSING DELAYED!
TAX WITHHOLDINGS CHANGES
Payroll Tax Cut to Boost Take-Home Pay for Most Workers; New Withholding Details Now Available on IRS Web Site
According to IR-2010-124, dated Dec. 17, 2010:
"Millions of workers will see their take-home pay rise during 2011 because the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provides a two percentage point payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid. This reduced Social Security withholding will have no effect on the employee’s future Social Security benefits."
PROCESSING DELAYS
Tax Season Starts on Time for Most Taxpayers; Those Affected by Late Tax Breaks Can File in Mid- to Late February
Taxpayers affected by three recently reinstated deductions need to wait until mid- to late February to file their individual tax returns. In addition, taxpayers who itemize deductions on Form 1040 Schedule A will need to wait until mid- to late February to file as well. See IRS Web Site
- Because of late Congressional action to enact tax law changes, anyone who itemizes and files a Schedule A will need to wait to file until mid- to late February.
- Taxpayers claiming the Higher Education Tuition and Fees Deduction will also have to wait until IRS programming is complete.
- Processing is also delayed for taxpayers claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250. The educator expense deduction is claimed on Form 1040, Line 23, and Form 1040A, Line 16.
WANT A REFUND TO FILL YOUR POCKETS?
Were you expecting a refund last year? Do you think your tax withholdings were sufficient? Did you end up owing last year and just didn’t understand why?
Then the following applies to you.
The American Recovery Reinvestment Act of 2009 made changes that affected your federal income tax withholdings. Periodic withholdings for the year 2009 were reduced to act as a stimulus on the economy. This could have adversely affected higher income married couples by causing too little to be withheld between them. Consequently, the IRS urges that you use their on line calculator to properly complete your W-4. You can find this calculator at the IRS Web Site.
This easy-to-use calculator can help you figure your Federal income tax withholding so your employer can withhold the correct amount from your pay. This is particularly helpful if you've had too much or too little withheld in the past, your situation has changed, or you are starting a new job.
According to the IRS employees can benefit from this calculation:
- Who would like to change their withholding to reduce their tax refund or their balance due;
- Whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit);
- Who have non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures.
NOTE: BE CAREFUL! When filling out the form online, the results can only be accurate as the data you supply. So please, have your pay stub, past tax return, and make reasonable estimates.
If you really want a refund and used the calculator to help you determine you will owe taxes, then send in a 1040-ES Payment Voucher.
TO IRS WITHHOLDINGS CALCULATOR
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