What you don't know CAN hurt you ...

That's right, the stimulus package passed last February may indeed cause you to OWE more money come tax time.

Most of this has to do with the changes to the withholding tables. Sure, it was nice to take home $13 extra per week, but the changes to the withholding tables did not take into consideration:

• dependents who receive wages;
• single taxpayers with more than one job; and
• joint filers where one or both spouses have more than one job or both spouses work.

Other groups potentially affected include:

• individuals who file a return with an Individual Taxpayer Identification Number;
• those who receive pension payments; and
• Social Security recipients who receive wages.

According to J. Russell George, the Treasury Inspector General for Tax Administration: "More than 10 percent of all taxpayers who file individual tax returns for 2009 could owe additional taxes because their withholdings were reduced by more than the Making Work Pay Credit. If corrective actions are not taken, this problem will continue to plague taxpayers in 2010."

For the full report, click here.

Owen S. Arnoff, Enrolled Agent
Admitted to Practice Before the Internal Revenue Service
http://www.betterbusinessventures.com
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