Withholding Tables, Making Work Pay

[geekgirldany]

I've had several clients they are getting less refunds or even owing because of the change in withholding tables. Is this still in effect for 2010? I mean will the same problem come up in when we prepare 2010 returns?

[KBTS]

The Making Work Pay credit is still in effect for 2010, so the reduced withholding should still be in place. I'm not sure if the same problems will exist when both spouses are claiming "married" on their W-4's like last year - I saw some research which showed in some cases each spouse would have nearly $600 extra in take home pay and only the $400 credit to offset. Last year, you could check the withholding tables originally issued by the IRS from January with the revised ones issued in March or so to see the effects, but the tables already figure in the MWP credit this year so I do not know for sure. Hopefully someone here will know because I've had clients asking about this.

[dyne]

It is my understanding that the Making Work Credit and schedule M will be in affect
for the 2010 tax year. It has been reported that ANOTHER $250 Economic Recovery
Payment MAY be forthcoming soon. I hope not as without a second $250 payment
during 2010 the schedule M would be much simpler next year.

[geekgirldany]

Thanks for posting. Well this is mess. I've gotten several new clients that are not too happy. I try to explain about the withholding tables but it seems to be over their head. I'll have to tell them to expect the same thing for 2010. And of course it is my fault because their old preparer got them a refund.

[taxea]

Make work pay or not working couples should be advised to withhold as follows:
the spouse making the higher pay should take the exemptions, the spouse making the lower pay should always claim single-zero

[geekgirldany]

Thank you TaxEA. Great advice.

[geekgirldany]

Just got off the phone with another new customer that is pretty mad about having to owe. Always got back, never owed. Told her to look it up on the internet about the withholding tables causing trouble. Plus added that she would need to do Single 0. Told me she could not believe that change would cause this problem.

So I am thinking that I may get a call that they want to go somewhere else.

[David1980]

Of course the reason they owe is they got the SUPER RAL! Why the RAL was so fast they got their money before the year was even over! I bet they weren't complaining when they were getting more money on their paychecks.

[geekgirldany]

That's pretty good
They don't understand that. Don't mean to turn this into a rant post. But I hate it when someone doubts my abilities as a tax preparer. She was asking if I was sure I deducted everything.

[dyne]

I agree it is a MESS! And I do not like to GUESS when I prepare the schedule M.
The telephone number to the SSA is worthless! I have never been able to get through
to SSA to verify if they received the $250 payment or not. I anticipated this being a problem when I first heard of the issue late in 2009. Actually so FAR I have not gotten a reject from IRS regarding this issue, but is is inevitable that I will receive some. I have encountered a number of clients who did receive social security benefits in a large amount during 2009 but only began receiving the benefits after January 2009 so he or she did NOT receive the $250 payment.