Tax break my A**

Well, I hope everyone is enjoying the few extra dollars they're seeing in their paychecks, thanks to Obama's tax break. But just in case you think this is really a good thing remember what I tried to tell you all that this would come back to bite you in the end, because it would be taken back when you file your taxes next year.

INSIDE WASHINGTON: Taxpayers to get rude surprise
INSIDE WASHINGTON: Millions of couples, retirees may have to repay some of Obama tax credit
Stephen Ohlemacher, Associated Press Writer
On Thursday April 30, 2009, 6:55 pm EDT

Buzz up! Print WASHINGTON (AP) -- Millions of Americans enjoying their small windfall from President Barack Obama's "Making Work Pay" tax credit are in for an unpleasant surprise next spring.

The government is going to want some of that money back.

The tax credit is supposed to provide up to $400 to individuals and $800 to married couples as part of the massive economic recovery package enacted in February. Most workers started receiving the credit through small increases in their paychecks in the past month.

But new tax withholding tables issued by the IRS could cause millions of taxpayers to get hundreds of dollars more than they are entitled to under the credit, money that will have to be repaid at tax time.

At-risk taxpayers include a broad swath of the public: married couples in which both spouses work; workers with more than one job; retirees who have federal income taxes withheld from their pension payments and Social Security recipients with jobs that provide taxable income.

The Internal Revenue Service acknowledges problems with the withholding tables but has done little to warn average taxpayers.

"They need to get the Goodyear blimp out there on this," said Tom Ochsenschlager, vice president of taxation for the American Institute of Certified Public Accountants.

For many, the new tax tables will simply mean smaller-than-expected tax refunds next year, IRS spokesman Terry Lemons said. The average refund was nearly $2,700 this year.

But taxpayers who calculate their withholding so they get only small refunds could face an unwelcome tax bill next April, said Jackie Perlman, an analyst with the Tax Institute at H&R Block.

"They are going to get a surprise," she said.

Perlman's advice: check your federal withholding to make sure sufficient taxes are being taken out of your pay. If you are married and both spouses work, you might consider having taxes withheld at the higher rate for single filers. If you have multiple jobs, you might consider having extra taxes withheld by one of your employers. You can make that request with a Form W-4.

The IRS has a calculator on its Web site to help taxpayers figure withholding. So do many private tax preparers.

Obama has touted the tax credit as one of the big achievements of his first 100 days in office, boasting that 95 percent of working families will qualify in 2009 and 2010.

The credit pays workers 6.2 percent of their earned income, up to a maximum of $400 for individuals and $800 for married couples who file jointly. Individuals making more $95,000 and couples making more than $190,000 are ineligible.

The tax credit was designed to help boost the economy by getting more money to consumers in their regular paychecks. Employers were required to start using the new withholding tables by April 1.

The tables, however, don't take into account several common categories of taxpayers, experts said.

For example:

--A single worker with two jobs making $20,000 a year at each job will get a $400 boost in take-home pay at each of them, for a total of $800. That worker, however, is eligible for a maximum credit of $400, so the remaining $400 will have to be paid back at tax time -- either through a smaller refund or a payment to the IRS.

The IRS recognized there could be a similar problem for married couples if both spouses work, so it adjusted the withholding tables. The fix, however, was imperfect.

-- A married couple with a combined income of $50,000 is eligible for an $800 credit. However, if both spouses work and make more than $13,000, the new withholding tables give them each a $600 boost -- for a total of $1,200.

There were 33 million married couples in 2008 in which both spouses worked. That's 55 percent of all married couples, according to the Census Bureau.

-- A single college student with a part-time job making $10,000 would get a $400 boost in pay. However, if that student is claimed as a dependent on a parent's tax return, she doesn't qualify for the credit and would have to repay it when she files next year.

Some retirees face even bigger headaches.

The Social Security Administration is sending out $250 payments to more than 50 million retirees in May as part of the economic stimulus package. The payments will go to people who receive Social Security, Supplemental Security Income, railroad retirement benefits or veteran's disability benefits.

The payments are meant to provide a boost for people who don't qualify for the tax credit. However, they will go to retirees even if they have earned income and receive the credit. Those retirees will have the $250 payment deducted from their tax credit -- but not until they file their tax returns next year, long after the money may have been spent.

Retirees who have federal income taxes withheld from pension benefits also are getting an income boost as a result of the new withholding tables. However, pension benefits are not earned income, so they don't qualify for the tax credit. That money will have to paid back next year when tax returns are filed.

More than 20 million retirees and survivors receive payments from defined benefit pension plans, according to the Employee Benefit Research Institute. However, it is unclear how many have federal taxes withheld from their payments.

The American Federation of State, County and Municipal Employees union raised concerns about the effect of the tax credit on pension payments in a letter to Treasury Secretary Timothy Geithner in March.

Geithner responded that Treasury and IRS understood the concerns and were "exploring ways to mitigate that effect."

Rep. Dave Camp of Michigan, the top Republican on the tax-writing House Ways and Means Committee, said Geithner has yet to respond to concerns raised by committee members.

"So far we've got the, 'If we don't address this maybe it will go away' approach," Camp said.

IRS withholding calculator:

Cats and windows

For the past few weeks we have had such wonderful weather we've been able to open windows. The cats love this as they get to sit in the window and enjoy the air and get closer to the nature outside. Bug likes the one behind my chair, in the living room, and Marmalade is partial to the one in my bedroom. Yesterday, Bug, kept bugging me (pun intended) to open the windows. I told him I would when I got back from dropping Keith off at work. As soon as I got in the door Bug was after me open the windows. I did and he quickly claimed his favorite spot.

This morning, as I was getting ready, Marmalade was actually trying to open the window in my bedroom. I told him I would do it when I got back. Well, I had laundry to do and a few stops to make, but when I got home I went around and opened windows. When I got to the one in my bedroom Marmalade was patiently waiting. Well, as patiently as a cat can wait. As soon as I unlocked it he had his paws on it trying to push it up. I helped him and together we opened it and he took his perch to watch his kingdom from the window.

The great outdoors part II

Well, I was having lunch with my friend, Cyndi, yesterday and we got to talking about all the work I'm doing around my yard. Cyndi loves to work outside as much as I do, so when we finished lunch she said she would go to her home and get her equipment and join me in my yard. We had two hours before I had to go pick up Keith from work, so off we went! OMG! We cut, sawed, pulled, and stacked brush, saplings, and some unidentifiable things, but we got it done! wow! and then Cyndi went home to trade her car for her truck and friend that she is she hauled it all off to the recyling center for me. Of course, today, my ribs and stomach hurt from all the additional excercise but I'm enjoying it. It's a good hurt. Over the weekend I'm going to work more on trimming the holly back and down to a managable level and clean out the back shed a bit more. That is actually looking pretty good these days with me hauling out all the junk, old boxes, and yesterday (another reason my ribs hurt) a huge! roll of old insulation that had gotten wet and was rotting and mildewy. That made a big difference in the shed. Hauled it out to the curb for the city to pick up and they took that away this morning. Ah! Spring cleaning. I know, I know, it's supposed to be spring cleaning inside, but dang! I hate housework! I do what needs to be done but don't get all that carried away until I get into a mood of... hmmmmm...this furniture needs moved, this room needs to be changed with another room...yeah...i feel one of those moods coming on!!!! Happy Spring!

The great outdoors

Over the weekend, the young couple on the right side of our house, trimmed the hedges between the two yards. The wife came over and worked from our side of the hedge and the husband worked on the other side. When they were done it was beautiful and all the flowers looked big and lush and lovely. So, today I decided to work on the ones in front of the house. Unfortunately a lot of small saplings are growing up between the beautiful flowering hedges making it look awful! I got a bit done today and it looks so good I'm going back out to do more tomorrow. There is one drawback to all this exercise and fresh air, though. It tires me out and I fall asleep sitting in my chair. It's a good tired, but dang, I'd rather wait until I was in bed to sleep. Oh well...at least I got some good sleep.

His last April Fool's joke

My ex-husband, Ralph Braueler, had a very offbeat sense of humor. In the fourteen years of our marriage I learned to appreciate his dry humor. He reminded me a lot of Bob Newhart. You had to pay attention to realize how funny he really was. When he was teaching our nephew, Brian, how to drive he told him the deer on it's hind legs meant dancing deer and that the two wavy lines with a car in the middle meant drunk driver ahead. A truck on an incline sign meant falling trucks ahead. Sadly Ralph developed esophogeal cancer and the doctors didn't expect him to live through the Christmas holidays. (Christmas of 2008). Well, Ralph surprised us all and lived a few months longer than the doctors predicted and typical of his offbeat sense of humor Ralph passed away on April 1st (April Fool's Day). Even in dying he got in the last laugh. Even after our divorce we remained friends and stayed in contact over the years until he became too sick to get online. I am deeply greatful to his lovely second wife, Belinda, for understanding I still cared about Ralph and for keeping me updated on his health. The first picture is how I remember him, but I wanted to include the one taken last Christmas because it showed that even facing a catastrophic illness he had not lost his sense of humor. Check out the reindeer horns. Goodbye my friend you will be missed!