Stimulus bonus = more money in your pocket
You could see fatter paychecks from the "Making Work Pay" stimulus bonus.
Get ready for a fatter paycheck. The “Making Work Pay“ tax credit takes effect on April 1, which means most taxpayers will soon see an increase of about $30 per paycheck in their take-home pay. Individual taxpayers could receive up to an additional $400; $800 a year for married joint filers. The tax credit is available for 2009-2010.
Sounds like fantastic news, right? There are a few things to consider though, before you go spending all that extra cash:
You have two jobs: If both your employers pay the full tax credit, you may actually owe Uncle Sam money at the end of the year. To avoid this, check with your employers to see if they’re withholding the correct amounts.
The credit doesn’t apply to everyone: This tax credit will be calculated at a rate of 6.2% of earned income and will phase out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 for married couples filing jointly).
There’s a little more fine print, but overall the tax credit lets most people get more back. The government hopes these workers will turn around and spend the money to boost our sagging economy.
Read what the IRS has to say about the credit. CNN Money also has a thorough article on what you need to know about the stimulus money.
A lot of people have been saying they’d rather get a lump sum of $400, while others say a slow distribution of roughly $30 per paycheck means people are more likely to spend the extra cash… and that the economy really needs it.
What do you think? Also, what do you plan to spend this extra money on?
