New year, new withholding amounts

January 6, 2010

No, I'm not talking about adjusting your withholding, although that's always a good idea so that you pay in through payroll taxes just what you'll owe the IRS when you file.

Direct deposit check

I'm talking about what your first paycheck of 2010 is likely to look like. For some, it will be less than they got in their final 2009 check.

The reason is more withholding changes because of the Making Work Pay credit.

Yep, that provision in the American Recovery and Reinvestment Act of 2009, aka the stimulus, that was supposed to put more money in our hands will appear to some workers to be diminishing their take-home pay.

Here's why. Although the $400 due each worker was for the full 2009 calendar year, the withholding tables that accounted for the paycheck payouts went into effect in April. That meant the $400 was doled out over just nine months instead of 12.

Basically, using rough math, workers got around $44 a month extra for those last nine months of last year.

But when you spread the $400 over the 12 months of 2010, that comes to just more than $33 a month.

So while you are indeed getting $10 a month less now than you did at the end of 2009, you still will get the full $400 as long as you work through December 2010.

I just thought you should know so you wouldn't go ranting to your payroll office — or worse, to your boss! — about your "pay cut." 

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Tax Season 2026 Continues!

We made it. Tax Day 2025 is finally over. For most of us. When the filing season started on Jan. 26, millions who were expecting refunds filed immediately. Most of us got our returns to the Internal Revenue Service by April 15. But plenty of taxpayers also got extensions. They are looking at an Oct. 15 filing deadline.

Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • Debbi e M

    This doesn’t explain to me why there are now two additional tax rates (27% and 30%) or why the 30% rate was inserted between the 27% rate and the 28% rate. My source: http://www.irs.gov/pub/irs-pdf/n1036.pdf

  • Its true but it seems that no one complains when the taxes are extortionate. The question is where does the taxes go…..

Comments are closed.