Just got the most recent retiree statement and noticed almost 3/4 less was withheld for federal tax. Granted we haven't been keeping up on the computer, and most statements go directly to the file cabinet, but what the %^$# have we missed?

Did some bill get passed that slid under our radar, or is the PPC at fault for a mistake?

This reduction in the Federal Withholding Tax is part of the stimulus package. It only applies to the Federal Tax, not the State Tax. The amount of tax you will owe will not be changed. If you are not happy with the amount being taken out you should submit a new W4 form.

Thanks. Making the call this A.M.

That's correct. They are just putting more $ in your pocket now so you can spend it, but when you file your taxes next year...Happy Birthday...you still owe all that $ back. Resubmit a W4 ASAP unless you are ok to pay back next year.

What a crock of SH*t....

'Nuff said....

Wray...

And like Jerry Garcia's line in his song 'Touch of Grey' ,,"It's even worse than it appears..."

Not only will you have to pay more back when you file next year - if it turns out that you owe more than 10% of your taxes and over $1000 - you also owe a penalty!!

If you work for the Federal Government and have access to your profile (to incude your W-4) on line, you might consider just adjusting your taxes from your civil service job. Otherwise, Topeka requires that you print, complete and mail (no fax) the W-4 form. I guess I am lazy, so I just adjusted my civil service federal tax withheld ... it's same 1040 that I will be completing next year.

Keko... I'm going to do it the simple way.. get a new W-4 and make an additional monthly payment amount for the amount they reduced my taxes.. (about $65)

After talking to PPC today that is what several others are doing...

Wray...

[QUOTE]Originally posted by Wray:
Keko... I'm going to do it the simple way.. get a new W-4 and make an additional monthly payment amount for the amount they reduced my taxes.. (about $65)

After talking to PPC today that is what several others are doing...

How Ya Doooin Wray!!

I changed mine yesterday (Playing it Smart) "Easy Givith, Easy Takith Away)
Going straight out "Shaft Alley"

quote:

If you work for the Federal Government and have access to your profile (to incude your W-4) on line, you might consider just adjusting your taxes from your civil service job.

Even better, if you work for the federal gov't. you can restore your net pay to what it was by pushing the reduced withholding amount ("Obama bucks") into TSP. Seems like a no-brainer, I mean why give it back?

This member (Anusaurus_Rex) ---> regardless of where you put the money, what do you think will happen next year when you go to file your taxes?

Wray...

My friends call me Anus but you can call me Rex.

I will have reduced my taxable income by the amount that would previously have been withheld but is now going to TSP, and hopefully come out even owing niether more nor less at the end of the year than I would have had they left my withholding alone to begin with.

you will get a MAKING WORK PAY CREDIT. for 09 and 10 $400 person $800 per family so changing your with holding will not be necessay
do a google search for MAKING WORK PAY CREDIT

Andrew,
Thanks for that info.. I will take a look at it.... Wouldn't you think those at the pay center would have known about that? Wouldn't you also think the pay center would have put out some sort of bulletin or notification about it? even something in the LES comments section.. gues that was too much to ask for.

Wray...

now I understand the MAKING WORK tax credit is for earned income only, no job no cedit

Unfortunately many of us military retirees who have civil service jobs won't get that tax credit and will still have to pay the same amount of tax.

quote:

And like Jerry Garcia's line in his song 'Touch of Grey'

You mean like Robert Hunter's line in his song 'Touch of Grey'

7 Misconceptions About the Stimulus

by Kimberly Lankford
Thursday, April 9, 2009provided byKiplinger'sPersonalFinance

Since President Obama signed the economic-stimulus package into law February 17, I have received many questions about its provisions. And I've noticed that there are a lot of misconceptions about the plan. Here's the lowdown.

Misconception #1: Most people will get their stimulus money as a check this year.

Instead of receiving a check from the government, most single taxpayers will see an adjustment to their tax withholding in their paychecks in 2009 and 2010, giving them about $45 extra per month for the rest of this year (married workers will receive an extra $65). If you're self-employed, you can adjust your quarterly tax payments to benefit from the tax credit. Then you will claim the credit when you file your 2009 tax return next spring, bringing your tax bill in line with your reduced payments.

The stimulus also provides a one-time payment of $250 to recipients of Social Security, Railroad Retirement and Veterans Administration benefits.(People who applied for any of these benefits for the first time after January 31 don't get the money; only those on the rolls in November and December 2008 and January 2009 are eligible.) You'll get the money electronically or by check, depending on how you receive those benefits. Retired government employees who don't receive Social Security will also get a $250 credit when they file their 2009 returns.

Misconception #2: The adjustment to withholding will have to be paid back when you file your tax return next year.

Wrong -- the stimulus is actually a 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 is refundable, which means that you can still receive the full credit even if it is worth more than your total tax liability.

Paychecks are being adjusted now to get more money into the economy faster. You'll claim the credit when you file your return next year, so your tax bill should adjust in line with the stimulus money (and you might get some extra money at tax time if your withholding wasn't adjusted enough to account for the extra credit during the year, which may happen for some married people in single-earner households).

But not everyone qualifies for the credit. It 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.

Misconception #3: The first-time home buyer's credit needs to be repaid.

You may not have to repay the credit, depending on when you bought the house.

If you buy a house between January 1, 2009, and December 1, 2009, you could receive a credit for 10% of the home's purchase price, up to $8,000. This credit does not have to be repaid as long as you own the home for at least three years.

If you bought a first home between April 9, 2008, and December 31, 2008, you are eligible for a tax credit of 10% of the home's purchase price, up to $7,500 -- but the credit must be repaid over 15 years, starting two years after you claim the credit. If you sell the home before you finish paying back the credit, the balance is due in full the year of the sale.

The 2008 and 2009 credits begin to phase out if your modified adjusted gross income is more than $75,000 (or $150,000 if you're married filing jointly). The credit disappears entirely after your income reaches $95,000 if you're single, or $170,000 if married filing jointly. You are considered a first-time home buyer if you (and your spouse, if you are married) didn't own a primary residence in the past three years. The credit does not apply to rental property and vacation homes.

Misconception #4: You can't get the 2009 first-time home-buyer tax credit until you file your tax return next year.

Actually, taxpayers who buy a first home in 2009 do not need to wait until they file their 2009 return (by April 15, 2010) to benefit from the credit. To get the money into the economy faster, the federal government is giving you a choice of claiming the first-time home-buyer credit on either your 2008 or your 2009 tax return.

There's actually a way to benefit from the credit even before you buy your first home. If you plan to buy by the November 31 deadline, you can reduce your withholding on your paychecks right away. The increased take-home pay could help you with the down payment. File a new W-4 form with your employer to adjust your withholding. (And remember to re-adjust your withholding again next year.)

If you have already filed your 2008 return, you can use Form 1040X to amend it. If you purchase a first home after the 2008 tax-filing deadline of April 15, 2009, you can still claim the credit on your 2008 tax return either by requesting a six-month extension for filing your return (which doesn't extend the deadline for paying any taxes owed) or by filing an amended return.

Misconception #5: You need to apply through the government to get the COBRA health-care subsidy.

Contact your former employer, not the government, to take advantage of the COBRA subsidy. If you were laid off since September 1, 2008, and are already receiving COBRA coverage, then you'll pay 35% of the COBRA health-insurance premiums, and your former employer will pay the remaining 65%. The government will then reimburse your former employer for the subsidy through a payroll tax credit.

If you were laid off on September 1, 2008, or later but didn't sign up for COBRA coverage, you'll get a second chance to elect COBRA and benefit from the subsidy. You should receive a notice from your former employer soon, or contact your former employer to find out about the steps for signing up.

Misconception #6: You can receive the COBRA subsidy the entire time you're covered by COBRA.

Federal law requires most companies with 20 or more employees to let former employees keep group health-insurance coverage for up to 18 months after they leave their jobs. But the 65% COBRA subsidy lasts for only nine months. After that, the premiums will jump back to the full price - and the average employer health-insurance plan costs $12,680 per year for family coverage, according to the Kaiser Family Foundation.

If you have health issues, COBRA may still be your best bet despite the hefty price tag. But many people can find a better deal by buying their own health insurance. You can get price quotes for individual policies at eHealthInsurance.com, or find a local health-insurance agent at the National Association of Health Underwriters Web site. Check out your options at least one month before your COBRA subsidy expires so you'll have plenty of time to find out how much an individual policy would cost.

The subsidy ends if you find a job and your new employer offers health-care coverage or you become eligible for Medicare. And COBRA does not apply if the company stops offering health coverage to current employees or shuts down entirely.

Misconception #7: The number of weeks you can receive emergency unemployment benefits has been extended.

The stimulus does not provide additional weeks of benefits for people who use their 33 weeks of emergency unemployment-compensation benefits; it just expands the dates that the program will be available.

A federal law passed last year provides an extra 20 weeks of emergency unemployment compensation to workers who exhausted their regular unemployment benefits, plus an additional 13 weeks of extended benefits for residents of states with high unemployment rates (contact your state unemployment-benefits office for details about your state's rules).

The emergency unemployment-compensation program was scheduled to expire on August 27, 2009, and the last day to apply for benefits was originally set to be March 31, 2009. As a result of the stimulus law, unemployed people who exhaust their regular state benefits now have until December 31, 2009, to apply for extended benefits and can receive compensation until May 31, 2010.

Copyrighted, Kiplinger Washington Editors, Inc.

Pushing into your TSP only works if you are not max out. But if you are already investing the max allowed by IRS, that is not an option. Bottomo line, this is not "free" money that Obama and others inside the Beltway want you to have for nothing. They do want you to go shopping and put it back in the economy, but you still owe them that money in taxes.