Economic Stimulus Beware

The new stimulus plan put into place by President Obama and Congress may have potential issues for certain taxpayers who normally receive an income tax refund when filing their taxes. The system designed to disburse these funds to taxpayers has some variables that are not accounted for, because they may differ based on each taxpayer's situation. For example, taxpayers most likely to be affected by this system are married taxpayers, who both work, or any taxpayer who has more than one paying job. The reason this system is causing a problem is the payroll tax tables always assume, when calculating your tax, that this is your only job and your only income. If it isn't, you will be getting a much larger reduction in your tax withholdings than you are entitled to and will be required to repay that tax upon filing your 2009 return. If your tax overpayment is still significant enough, allowing you to get a refund, this problem will just make the refund smaller. On the other hand, you might experience a role reversal and have to write a check back to the government next April 15.