Millions of Americans may owe the government money because of how the Internal Revenue Service set up the president’s tax break last spring.
President Obama‘s tax break was designed to help consumers spend the economy out of a recession. But ten percent of taxpayers may now owe Uncle Sam $250 or more.
“People will have to pay the government money rather than receive that tax credit. That’s going to be a hit for the government at the end of the day,” said Matt Will, associate professor of finance at the University of Indianapolis.
Will blames the government for carelessly pushing through the economic stimulus plan. The result is that workers with two jobs may have to repay the IRS up to $400.
“Anybody who has two jobs in the family, be in an individual with two jobs, a husband and wife who each have a job, a retiree who has other income, all of those people will be impacted by this,” said Will.
“If you’re a hard worker, and you have three or four jobs, you’re gonna get hit pretty hard plus penalties,” Will said.
Married couples who both work and got a tax credit will now owe up to $600. Retirees with jobs who get a Social Security check will owe up to $250.
“So where a lot of taxpayers thought they’d be getting a tax credit which they were, when they file their taxes this year, they’re gonna have to pay some of that money back, plus an additional penalty to the government,” said Will.
Experts say take this step to avoid the tax credit pickle.
“Every employee can go to their employer and refile their tax forms and say I would like less money withheld from my paycheck. Then you won’t have to pay a penalty at the end of the year and you may end up getting money back,” said Will.
according to wthr.com