Where's My 2nd Stimulus Check??

So, we had a call come in last week asking about a supposed 2nd stimulus check. After further inquiry, we realized that our client was referring to the Making Work Pay Credit. However, the rumor mill has been referring to it as a second stimulus check. So, let's clear the air and get it right...

The Making Work Pay Credit isn't another free refund check. It equates to a refundable tax credit of up to $400 for individuals and up to $800 for married filing jointly taxpayers. In the scheme of things, this money is received throughout the year by way of lowered tax withholding rates. This lower withholding typically amounts to approximately $16-35 per bi-weekly paycheck. However, particular taxpayers who fall into any of these following groups should review their W-4 to ensure enough tax is withheld: multiple job holders, families in which both spouses work, workers who can be claimed as dependents by other taxpayers and pensioners.

Failure to adjust your withholding could result in potentially smaller refunds or may cause you to owe tax rather than receive a refund next year.

If you're unsure about whether you're on track or not, there is a withholding calculator on the IRS website that can help you compute your proper tax withholding. If the result suggests an adjustment is necessary, you should submit a new Form W-4 to your employer. And, for our self-employed clients, you will need to adjust the amount of your quarterly tax payments.Of course, if you need help with this form, give us a call or shoot an email.

In addition, for those of you that have claimed or are claiming unemployment benefits in 2009, the first $2,400 of those benefits are tax-free for federal income tax purposes. However, anything over that amount, we STRONGLY advise that you consider having taxes withheld. We have seen so many people end up owing large amounts of money due to this slight negligence. The Employment Security Commission technically cannot advise you one way or another because "taxes aren't their thing." Well, taxes are our thing, so consider yourself warned...

Remember, your questions and comments are what will make this blog more valuable and worthwhile! Feel free to post your questions or comments here, or you can give us a call at (866) 510-5477 or via email info@proctortaxprep.com.