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Posted: Sunday, 25 October 2009 8:47AM

More Money in Your Paycheck May Mean More Owed to the IRS



SAN FRANCISCO (KCBS)  -- Some people got a bigger pay check this year thanks to the economic stimulus plan, but that might cost them when they file their taxes.

When the economic stimulus package was signed into law in the winter, it included the Making Work Pay tax credit, which gave workers a tax credit in the form of slightly larger paychecks.

However, IRS spokesman Jesse Weller says the credit has a potential downside, and some people might have less tax withheld than they would like.

ListenKCBS' Melissa Culross reports

"They actually could, in some limited cases, end up owning at the end of the year or get a smaller refund," he said.

The taxpayers this could happen to include married couples who both work and file their taxes jointly, people who have multiple jobs, Social Security recipients who work, pensioners, workers without valid social security numbers.

People who can be claimed as a dependent on someone else's tax form, like working college students, may also find themselves owing the tax man some money.

Weller advises that people check on their withholding and adjust it with their employer, if necessary. You can find an IRS withholding calculator at www.irs.gov/recovery.

 

(ewi)


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