by Stefani on January 30, 2010
You may have noticed that your paychecks are a little lower than they were in 2009. This could be due the the Making Work Pay Credit or, even worse, they’ve lowered your salary or hourly rate and no one’s bothered to inform you of this. Let’s hope it’s the former.
The American Recovery and Reinvestment Act of 2009 (ARRA), which was enacted in February 2009, made provisions for the Making Work Pay Credit that allows working individuals to claim a credit of either 6.2% of earned income or $400, whichever is lesser. Instead of receiving a check or having to wait to claim the credit on your 2009 or 2010 tax return, the withholding tables were adjusted so most of the credit could be distributed through a decrease in income tax withholding. So, yes, this meant that you saw a slight increase in your take-home pay. Now, because ARRA was enacted in February, the withholding tables weren’t adjusted until March, so the credit was spread out over 9 months.
In 2010, the $400 credit is actually spread out over 12 months instead of 9. So a little less credit in each paycheck, you’ve guessed it, means increased income tax withholding. It’ll all add up in the end.
I should note that some individuals, especially those with multiple jobs, should pay close attention to their withholding. Here’s why: If you have multiple employers, each employer will deduct withholding tax from each paycheck as if you were eligible for the credit. Now, if you have 3 employers all using the adjusted tables, they’re essentially withholding taxes from your check as if you were eligible for a $1,200 credit (400 x 3). In which case you may want to complete a new Form W-4 to increased your payroll withholdings so you don’t have any nasty surprises come time to file your 2010 income tax return.
by Stefani on January 30, 2010
2009 was definitely a very eventful year. I accomplished a few goals that I set for myself and even some that I didn’t.
I obtained my license
After months of toting around review books and studying during lunch breaks, I did it. Becoming an Enrolled Agent has definitely been one of my most significant accomplishments to date. Let’s just hope having a license actually helps to differentiate me from those “other” tax preparers.
I met an amazing guy
Easily one of the best things that has happened to me in 2009. I met, and quickly became good friends with this guy. Somehow he managed to woo me, and almost a year later, here we are… together… happy.
Finally went on that European Vacation
I’ve always planned on going to Europe, but for some reason or another, it just never worked out. The main culprit being work. Finally, In mid-December, Davide & I travelled to Italy to spend Christmas with his family. We also spent two days in Paris before returning home right before the new year. Though I didn’t get to see as much of Italy as I would have liked to, it was the best vacation I’ve ever been on. Ever. And, honestly, I’m just grateful for the experience. More about this in a later post.
Met a few amazing people
Some of the people I now consider good friends are people I met in 2009. There’s Willie who spends so much time with us he may or may not have moved into our apartment without us knowing. It’s an extremel rare occurrence for me to meet someone that I can hang out with just to hang out, doing nothing in particular, just to be in their presence. Willie’s one of those people.
And then there’s Steph Rose & Robert Murray who are both awesome. I met them a week apart from each other and both through Twitter. What’s unique about these two is the simple fact that their friendships don’t require work, it just is. We’ll go for weeks, even months, of not speaking to each other, and pickup right where we left off.
In 2010, there are tons that I want to do, big and small, personal and professional, but unlike most, I won’t be making any resolutions. I know every year most people resolve to do lots of things: lose weight, eat better, work out more, spend less money, etc. Who are they kidding? Aren’t most resolutions forgotten by mid-April anyway? I don’t plan on setting myself up for disappointment. There are things I’d like to happen, things I’d like to do, things that I’d like to change, but those will all happen in due time.
So, here’s what I’m looking forward to in 2010:
- Going to SXSW for the first time
- Travelling more
- Improving my photography skills
- Brewing my own beer
And just like that, I do away with 2009 (albeit a month late) and welcome 2010.