Gross IRS under withholding...was this my stimulus package?

to escrow the withholding at interest and pay my taxes when due. I'm not going to be one to complain but will expect many others just might. I'll expect more news stories as Apr. 15 approaches about those who spent the money (as is the purpose of stimulus cash) and can't pay their taxes now.

automatically move some money from your checking to a savings account every payday.

Diana

My checking and savings accounts are with different banking institutions. I think that's more wise than all eggs in one basket. I'm not going to stew over this for myself. It won't matter. I didn't think this was the best stimulus idea when it was instituted but looks like it will be continued for the coming year. I'll just redo my W-4 and drop both of us off the dependent list. Actually, bank savings interest is fairly pathetic at this time. Small amounts in savings aren't worth the hassle and possible fees. You don't get that 5% and up anymore...not even for large deposits. You get well under 1% with most generic savings accounts. Inflation and taxes eat all of that and more. From when you make your deposit until you get into your driveway, the account value has already decreased. I'm a bad American anyway...a frugal spender and don't carry any debt. If I don't have funds to cover something, I don't even think about owning it.

I read about this early last year and didn't pay much attention.

http://www.irs.gov/newsroom/article/0,,id=204447,00.html

I've been owing a bit for the past few years already as credits dropped off when my kids completed college and began taking care of themselves. This is how it should be. I fill out a new W-4 (withholding form) when a change occurs that's going to affect my taxes. I've actually tried to keep this to where I'm about 90% paid up. This year I'll be less than 70% paid. I've no reason to complain as I'll still pay the same total amount by any method of calculation. What concerns me, however, is those people who may just see the extra money in their paycheck every week and go spend it. Of course, that's really what stimulus money is supposed to do...encourage consumer spending. So now what happens to these folks on April 14th when they finally get around to filling out their tax forms? That early happiness just might fizzle.

always in arrears with his taxes. His rationale was that the penalty was cheaper than borrowing the same amount from a bank, so he used the money and invested. He felt that he came out ahead. Me, I can't stand being behind, I'm much happier getting a refund which I then use for some species of treat for myself or the family.

Rob

Also might get some relief under hardship program due to the errant withholding. Sounds like time to have a CPA or attorney who deals with IRS to take a look into it.

I was expecting maybe double but not triple. Although we did provide a considerable amount of her support, I dropped our daughter's dependency status so that she can claim herself. I won't suffer financially as I didn't rush out and spend the extra money. I just think it was a dumb idea on the part of the administration as it really serves to continue what is already a big problem...that too many people make their own "debt bed" to lie in by wanting everything NOW as opposed to saving for it. They get cash strapped and those of us who live within our means get to ante up to help them with their tab. The government's got it own overspending problems and I don't see where empowering the general population to follow that suit is going to help in the longer run.

It does sound as if the third party payroll manager made more than a small "oops" in your case and I'd guess you've made your employer aware of it. Paychex won't care about your satisfaction with their service as much as they will your employers. Hope you get dug out without needing the help of an old coffee can and harmonica.

One daughter chose not to complete a 4 year degree so we quit paying her gas and insurance, while continuing it for the other who did complete a 4 year Engineering degree. The one who got out with the two year degree we gave her dependency up, even though she continued living here. The third is only 10. Hopefully my wife changed her form to just 3 of us as I requested in 2009 since I expected to lose another dependent that year. The degree took a half year longer than expected, but next year she'll be her own dependent. The longer they can live at home while schooling works to family advantage since the parents can take a full deduction and those who were dependents on another's return can still take half a deduction, so the family as a group gets almost 1.5 deduction for that college student.

previous year even though she lived most of that time away. She's a college student in a work/study placement position and living in free housing on a small stipend. She has to pay tax on that money as, technically, she has an employer though it's not a living wage. What I found out is that, overall, it was cheaper for me to keep her on as a dependent but pay the tax she owed on her income myself. I had provided a car, insurance and housing when she wasn't in school or working. Our address is still her address of record so I don't think we cheated anyone. She finishes this summer with her masters and will be looking for work. If she can't find any right away, she'll be back home so I don't know how that will work out with the IRS. I'll need to check. Ohio allows both parents and dependent children a personal deduction if the child is listed on the federal return. I've not heard of the 1.5 deduction rule but may need to look into that this year.

My daughter will just take the standard deduction but I itemize. As I read who qualifies as a dependent, a healthy individual in college can't be older than 24. My daughter crossed that boundary last year. My thought about her returning home jobless was could I take her back as a dependent without poking her eyes out. Doesn't look like it.

I had my mother as a dependent for several years. For what you describe look at the income test for a dependent, which usually is providing more than half their income and living expense.

It's the expanded version of the crappy instruction booklet most tax payers stop reading at. It goes into more depth and gives more examples and even tells things the "instruction" booklet doesn't. It's long as a novelette, but worth the read.