Congress adjusts withholding limits

[Specop 007]

I posted this in P&N for discussion. I'm cross posting here just as an FYI so ATOT members are aware you may see a slight increase in your withholding. This of course will mean a smaller check.
Adjust your withholding allowances as you deem necessary.

http://biggovernment.com/2010/01/06/dems-tinker-with-withholding-tax-tables-for-2010/#idc-container

Unlike the middle class wage earners, who are going to see huge amounts taken out of their paychecks, unless they increase their exemptions on their W4 form, it’s an increase that most wouldn’t even notice–$10 or $20 in some cases. Here are some of the “highlights” of the new 2010 withholding tables:

1.) Congress has lowered the threshold to capture more wages that qualify to owe taxes–across the board. For example, in 2009 the withholding tax threshold began at weekly single wage levels of $138. In 2010, that same wage is lowered to $116. In short, instead of the taxable wage starting at $138, it is now down to $116–which changes the income threshold and taxes even poorer Americans.

For married couples, the change in the weekly base taxable wage changes from $303 in 2009 down to $264 in 2010. These lower wage thresholds can be seen throughout the new withholding charts for weekly, biweekly, semi-monthly, monthly, quarterly, semiannual, and annual, as well as daily and miscellaneous pay periods.

This across-the-board reduction in the initial wage threshold increases the number of wage earners who would have to pay taxes.

2.) Instead of seven (7) wage categories, there are now nine (9) wage categories. The new structure allows for direct taxation on the middle class with these wages broken out into smaller categories. The direct hit on the middle class withholding taxes can be seen on all of the new tables. Additionally, the IRS could not explain these changes.

Let’s look at the actual numbers for one category and compare them from 2009 to 2010:
2009 Biweekly, Single, Payroll Period, after subtracting withholding allowances

Not over $276: $0 in taxes
Over $276 – $400: 10% payroll tax
Over $400 – $1,392: $12.40 plus 15% of excess over $400
Over $1,392 – $2,559: $161.20 plus 25% of excess over $1,392
Over $2,559 – $6,677: $452.95 plus 28% of excess over $2,559 (Notice the large salary range)
Over $6,677 – $14,423: $1,605.99 plus 33% of excess over $6,677
$14,423: pays $4,162.17 plus 35% of excess over $14,423

Let’s look at the new numbers for 2010 Biweekly, Single, Payroll Period, after subtracting withholding allowances

Not over $233: $0 in taxes
Over $233 – $401: 10% payroll tax
Over $401 – $1,387: $16.80 plus 15% of excess over $401
Over $1,387 – $2,604: $164.70 plus 25% of excess over $1,387
Over $2,604 – $3,248: $468.95 plus 27% of excess over $2,604 (Notice the large salary range is gone)
Over $3,248 – $3,373: $642.83 plus 30% of excess over $3,248 (Notice the substantial increase and 30% tax rate on these wages)
Over $3,373 – $6,688: $680.33 plus 28% of excess over $3,373
$14,450: pays $4,169.99 plus 35% of excess over $14,450

These patterns of additional withholding can be seen throughout the new charts for the 2010 tax year for single and married persons. It appears that everyone earning a paycheck is affected, not just retired military; social security payments will remain the same.

 

[marvdmartian]

Yep, noticed that today. Got my earnings statement (for payday, Friday) e-mail this morning, went & checked the amount, and noticed it was ~$5 lower than it has been.

I figured it was just Congress getting a head start on collecting for their new shove-it-down-the-taxpayer's-throats health plan.


The good news, however, is that my deduction for Medicare went down a whole penny! Every two weeks! That means $0.26 extra in my check every year!! :awe:

 

[IronWing]

Yeah, this is today's party talking point. This post is popping up all over the web. I appreciate that the OP deleted a lot of the commentary though.

 

[techs]

So basically, the amount of taxes you owe at the end of the year is the same? But they will withold slightly more, meaning unless you adjust your withholding you will get back a larger amount on your taxes?

 

[mugs]

If you want to cross-post in OT, maybe you should strip out the P&N bullshit from the post

 

[SunnyD]

I claim 15 federal exemptions. Methinks it's not likely to bother me much.

 

[destrekor]

uh...
Looks like Congress finally had their wake up call.

This is absolutely necessary, tax bracket adjustments and more importantly, the amount of taxation in general, is a typical method of fighting the cost of war. They've been having a terrible time adjusting taxes, and even lowering taxes in some instances.
But the biggest factor here, and hopefully Congress does it right, is well... that damn deficit needs to be cut somehow. And so help me FSM, if they go on a new spending spree with this additional tax allowance versus using these additional earnings to manage the budget deficit, I might have to choke a bitch, that bitch being any member of Congress I run into.
Now is not the time to play around with increased federal spending on unnecessary things when we are still waging war and continue to increase an insanely large deficit.

 

[shiner]

uh...
Looks like Congress finally had their wake up call.

This is absolutely necessary, tax bracket adjustments and more importantly, the amount of taxation in general, is a typical method of fighting the cost of war. They've been having a terrible time adjusting taxes, and even lowering taxes in some instances.
But the biggest factor here, and hopefully Congress does it right, is well... that damn deficit needs to be cut somehow. And so help me FSM, if they go on a new spending spree with this additional tax allowance versus using these additional earnings to manage the budget deficit, I might have to choke a bitch, that bitch being any member of Congress I run into.
Now is not the time to play around with increased federal spending on unnecessary things when we are still waging war and continue to increase an insanely large deficit.

Better start working on your grip...you're gonna need it.