Remember the “Making Work Pay” tax credit many of us claimed last year. You know, the one
Obama said was the key tax break in his momentous, economic recovery package that passed in 2009. The one he claimed would pump up spending and stimulate our sagging economy. Now do you remember? Well guess what? That tax credit may come back to bite us in the ass! or should I say pocket- book.
Results of a recent government audit released today reveal that many of us may have received too much money from the credit, more than we were entitled to claim. Millions of taxpayers are in for a big surprise when they learn that they did not have enough money withheld from their paychecks and may have actually owed taxes in 2009, plus incurred penalties! Better yet, we may be in the same mess for our 2010 taxes! Merry Christmas to you from our president and the IRS!
So Obama tells us that this so called tax break will help us through these dark and dismal economic times by putting more money in our hands with every paycheck, money that we cam turn around and use right away to help kick start the economy, and know the government is saying “I’m sorry but you might not have had enough money withheld from your paycheck.”
Their advice, check your withholdings so you don’t get a surprise bill when filing your taxes!
Great advice considering that 13.4 million taxpayers may be getting a surprise tax bill for 2009.
That ought to stimulate the economy! Not!
So why are so many taxpayers being affected? Confusing IRS red tape of course! In order to get the tax credit taxpayers had to fill out a new form, Schedule M. Since they already had seen the effects of the credit’s through reduced payroll taxes many people simply ignored Schedule M or filled it out incorrectly. So although Obama’s tax cut was based on good intentions, it was just too damn confusing to claim correctly.
Guess what’s being excluded from the current tax bill that Obama’s expected to sign? You guessed it, the “Making Work Pay” tax credit! Yep, it’s being eliminated.
There is a bright side to this tax credit fiasco. The IRS is offering taxpayers a break, the Estimated Tax Penalty Waiver. If you receive a tax bill related to the Making Work Pay credit for 2009 you may qualify for special relief on the penalty. Yes, you heard right! The IRS will waive your penalty! Imagine that! If you should get an estimated tax penalty notice you can request a waiver, but because each taxpayers situation is different, you may or may not qualify, only the IRS knows for sure.
Enough already. This whole tax issue is out of control ! Legislatures are having a field day adding this and conceding that. It’s all a game to them. It’s time to get this tax debacle settled! There’s far too many, rules, regulations, red tape and loop holes to contend with . Tax law fill volumes! I’m telling you, some form of flat tax is the solution .Simplicity is the answer. In the meantime,keep an eye on your mailbox. There may be an IRS surprise in your future.