Breaking News: Several million Americans will be in for a shock this upcoming tax season. The Treasury Department bill that was designed to stimulate our dire economic condition could hurt your wallet when it's time to pay taxes.
You may have noticed that your paycheck have increased. This was due to the fact that the government lowered federal withholding. But for some, the lowered withholding amount will cost money when tax time rolls around.
The Numbers: A new study released by the Treasury Department reveals that over $15 Million could owe come April because of an over-calculation by the IRS.
The Three Most Affected Groups:
Group 1: Single People with 2 Jobs
If you have two jobs, the tax credit may have been given to each job for a total of $800 but you're only eligible for up to $400 in relief.
Group 2: Married Couples, Both Spouses Working
Couples are only eligible for an $800 total tax break. However, if both spouses make more than $13,000 per year, the new IRS withholding tables gave them a $1,200 tax break- $400 more than the amount allowed!
Group 3: Retirees
Retirees were given a $250 lump sum payment, but this lump sum payment was intended for those who didn't qualify for a $250 tax break. Around $50 million seniors on Social Security got the payment and a $400 tax break!
The $15 million who fall into these target groups can expect less money in a tax refund, or worse, being forced to pay the IRS for the first time. Although the IRS believes the amount of people estimated to be victims of the mix up was exaggerated by the Treasury Department, they're working on waivers for those might owe underpayment penalties.