Since Congress passed the economic-stimulus bill February 13, a lot of people have asked us how they will get their money. Some of the details will be worked out in the coming weeks, but here's what we know so far.
How much will the "Making Work Pay" tax credit be?
The stimulus provides a refundable tax credit of 6.2% of taxable wages in 2009 and 2010, to a maximum each year of $400 for single taxpayers and $800 for married couples filing jointly. The credit begins to phase out for single filers with adjusted gross incomes of $75,000 or higher, or $150,000 for married couples filing jointly, and it disappears entirely for single filers with AGIs of $95,000 or more, or $190,000 for joint filers.
How will I receive the credit?
You'll get the money through a reduction in income tax withheld from your paycheck, adding about $30 to $40 a month to most people's take-home pay. After the IRS adjusts its withholding tables, employers will change their automatic withholding systems; you shouldn't have do anything to get the extra money. The IRS says that most people should see the change in their paychecks this spring.
I am self-employed and don't have my taxes withheld. What should I do?
In that case, you could reduce your quarterly estimated taxes because of this credit, says Mark Luscombe, principal analyst with the tax and accounting group CCH. Then you will claim the credit when you file next spring, bringing your tax bill down into line with your reduced payments.
What about people who have a job now and have their withholding reduced, but then lose their job in the next few months?
"They will have reduced withholding for the period they work, then the amounts will be reconciled when they file their returns for the year," says Scott Weiner, senior tax analyst with the tax and accounting business unit of Thomson Reuters.
What will the stimulus payment be for retirees?
The stimulus provides a one-time payment of $250 to recipients of Social Security, Railroad Retirement and Veteran's Administration benefits, and to government employees who don't receive Social Security. They'll receive the money even if they have little or no income, says Luscombe. This payment will reduce the "Making Work Pay" credit if they are eligible for both.
How will retirees get their money?
People who get their Social Security or other benefits electronically will get this payment electronically as well, says Weiner. Others will get a check.
When will retirees receive the money?
"The statute says that payments must begin at the earliest practicable date, but no later than 120 days after the date of enactment," says Weiner. So retirees should get the payments before June 17 because President Obama signed the bill on February 17.
source: http://www.fox28.com/Global/story.asp?S=9909481
No comments:
Post a Comment