Stimulating Taxes

[kevin_standlee]

I got a note from my company's HR department advising us of changes in tax withholding on account of the stimulus package from the federal government. Following their instructions and going to the web site they directed, I determined that if I did not do something, I'd end up owing between $500 and $1000 in income taxes next April. Besides not wanting to have to come up with the money then, I thought there was a penalty for under-payment. So I had to refile my W-4 withholding exemptions form, and after all the changes percolated through, I end up with about $2/week more in take-home pay. Oh, well, at least my net pay didn't go down.

Comments

[kevin-standlee.livejournal.com]

What happened was that the Government changed the withholding tables to withhold less pay from people's paychecks; however, depending on how much on makes and one's specific tax situation, this can lead to one having insufficient tax withheld. Before I did any adjustment, my paycheck did go up a bit -- not as part of any raise, but simply because less tax was withheld. After doing the calculation and refiling my W-4, the net pay went back down, although it was still slightly more than what I'd been taking home before.