Make work pay deduction

**jas** · 01-02-2011, 03:11 PM

Did it expire? I have been looking online and am still not sure if we get it on our 2010 return. It says it expired this year, but does that mean we get it this year and not next year?

I have looked online at the IRS forms for the 2010 1040 form and it is on there. But since it is online I guess that could change. Has anyone gotten their 2010 Tax books yet? I went to the IRS office near me and they won't be out till this Thursday.

Any help would be appreciated as it will mean owing 800.00 more in taxes if it has expired.

TIA

**alotofgooddeals** · 01-02-2011, 03:14 PM

yesterday online using the hr block site...file electronically...and that tax break is still there....phew.. I couldn't believe it when it told me what my refund was going to be.. I was doing the happy dance...

**jas** · 01-02-2011, 03:41 PM

Glad to hear you are doing the happy dance over your refund!! I would be doing the not so happy dance if this was expired. Dh does side work and we set aside 30% to cover taxes. We have the money set aside for it though.

I was trying to figure out what our taxes would be this year based on last years and we would not have to send in quite a chunk. Then I got to looking online and read somewhere about the make work pay deduction going away. That would mean we have to send in all the money set aside. I was already thinking of where to put the money if we got to keep it.

Thanks!

**jas** · 01-02-2011, 03:43 PM

Does anyone know how long the change in the SSI will last? From 6.2% to 4.2% will it only be for one year?

I just want to be prepared when it stops.

**HappyMama** · 01-02-2011, 04:51 PM

Jas,

The making work pay deduction was replaced with a reduction in what individuals will be paying for social security....ahem....interesting to say the least. So an individual making 50,000 will no longer have the making work pay deduction but a 2 % give or take less in social security tax saving them about 1,000 a year. An individual making 100,000 will save about 2,000 a year. Individuals making less then 20,000 nothing as this will not help them like the making work pay did.

By the way on another note, as this wasn't passed on time, anyone filing their return with a schedule A for deductions ( for a child's education or other things ) will have to wait until after Feb to file as they will have to change their software to accommodate the changes...sigh... They say this will affect about 70 million who file with this .

Here is an article that might help.

Tax breaks could boost paychecks by up to $40 - Dec. 31, 2010

Here is some excerpts:

This reduction, intended to stimulate the economy, takes the place an expiring tax break, known as Making Work Pay, that was passed as part of the stimulus effort in 2009.

For most tax filers -- 73 million to be exact -- it will mean more money in their weekly paycheck, according to numbers from the Tax Policy Center, a nonpartisan research group.

Individuals who make $50,000 will see a bump of $1,000 in take-home pay in 2011. Back out the expiring Making Work Pay tax break that was worth $400, and the net result is an extra $600 a year, or $11.54 per week. For couples making $50,000 the increase will be $3.85 per week.

Individuals fare better under this plan because Making Work Pay awarded eligible couples twice the benefits.

Higher income earners were not eligible for Making Work Pay and will fare even better under this plan: Individuals making $100,000 will see a $2,000 increase in take home pay -- or $38.46 per week. Couples making $100,000 will see an increase of $23.08 per week.

**HappyMama** · 01-02-2011, 04:53 PM

Originally Posted by jas

Does anyone know how long the change in the SSI will last? From 6.2% to 4.2% will it only be for one year?

I just want to be prepared when it stops.

Sorry didn't see this question, it is my understanding until 2012, then will be reviewed.

**jas** · 01-02-2011, 05:13 PM

Just to be clear, we got the make work pay on our 2009 tax return. We don't get it in on our 2010 and for 2011 during the year we get the reduction of social security form 6.2% to 4.2%. It is confusing because you file your taxes in the next year (file 2009 taxes in the beginning of 2010, 2010 taxes in beginning of 2011)

Is this right? So 2010 is left out of any tax break?

**lparker** · 01-02-2011, 05:43 PM

Then you have -

making work pay tax credit

You would THINK that if the gov discontinued the credit, they would take this off their site.

Lee

**HappyMama** · 01-02-2011, 05:58 PM

Originally Posted by lparker

Then you have -

making work pay tax credit

You would THINK that if the gov discontinued the credit, they would take this off their site.

Lee

Exactly! Smile your tax payer dollars at work....

**NikoSan999** · 01-02-2011, 08:08 PM

Originally Posted by jas

Does anyone know how long the change in the SSI will last? From 6.2% to 4.2% will it only be for one year?

I just want to be prepared when it stops.

Jas, can you tell me what this change consists of? I must have had my head buried cause I missed it...thank you in advance

**HappyMama** · 01-02-2011, 08:23 PM

Originally Posted by NikoSan999

Jas, can you tell me what this change consists of? I must have had my head buried cause I missed it...thank you in advance

Niko,

The article I put up states that there will be a reduction in what people pay for social security tax in their wages from 6.2 to 4.2%

**jas** · 01-02-2011, 08:23 PM

Originally Posted by NikoSan999

Jas, can you tell me what this change consists of? I must have had my head buried cause I missed it...thank you in advance

From what I understand in that tax bill thing Obama passed last month or right before the holidays starting on Jan 1st the SSI withholding on your paycheck with go from being 6.2% to 4.2% meaning you will get more in your paycheck.

Federal Tax Withholding Tables and Social Security Tax changes for 2011

hope this helps

**Luckybustert** · 01-02-2011, 08:37 PM

I'm guessing the more in our check is supposed to entice us to SPEND more. I'm just wondering if it will be enough to offset the rise in gas and food prices...??

**jas** · 01-02-2011, 08:58 PM

Originally Posted by Luckybustert

I'm guessing the more in our check is supposed to entice us to SPEND more. I'm just wondering if it will be enough to offset the rise in gas and food prices...??

I doubt it. It is not a permanant change so we better not get used to it. I am sure it is supposed to make us spend more. We will because everything is going up, up, up regardless.