Remember the stimulus money that we got from the government in 2008? They wanted us to spend it in order to stimulate the economy, but most of us used it to pay off existing debt or saved it. Since we foiled their plan and did what made sense, this year they came up with a new plan. Remember that? On April 1, withholding was changed on our paychecks. If I remember correctly, they said the average person would have $20 less per week withheld for federal income tax than usual. The thinking was that if we got stimulus money in small increments we would not have the discipline to use it wisely. Uncle Sam wanted us to spend it.
I noticed the difference on my husband’s first paycheck in April. I saw a potential problem and I sure am glad I did. I figured that my paycheck was probably not considered when this was done. I was working on contract at the time and had to do my own withholding. So, I began to put what normally would have been kept out of my husband’s check into a savings account, just in case. Later, we changed his status on his W-4 so they would take out more. I wasn’t sure what they would do if we owed a lot of money over a long period of time. They do have penalties for that, you know. And I could just see me having a huge argument with them.
Well, guess what? I got this little email from H&R Block the other day inviting us to go see them next year for our annual blood-letting. And guess what they said? Fifteen million taxpayers may have a surprise come next April because of less money being withheld from their paychecks. Seems like Washington’s little plan not only doesn’t take into account a contract paycheck that a spouse may have. It also doesn’t account for a second job that a person may have, or any other income a household may have.
It’s all going to hit the fan in 2010 when people start filing taxes. Some folks won’t get back as much as they usually do and some who always get money back will end up owing. So much for stimulus. And Happy April Fool’s Day to us, huh?