2011 Income Tax without Make Work Pay Tax Credit.

[clydewolf]

As we complete and file our 2010 1040 tax return, we notice Schedule M, Make Work Pay Credit, where taxpayers
with earned income can qualify for a tax credit of up to $400 ($800 MFJ). This tax credit is recorded on your 1040 line 63
of the Payments Section. That makes this tax credit a Refundable Tax Credit. As such it is first used to pay your tax bill, and
any excess is refunded to the taxpayer.

The Tax Bill that became law on December 17, 2010 did not extend the provision of the Make Work Pay Tax Credit.

With that additional $400/$800 tax payment eliminated, it would be good tax planning for all employees to check their current
withholding for income tax purposes. To avoid a tax penalty for paying too little income tax throughout 2011, one of the Safe
Harbors is for your withholding to equal your 2010 Total Tax on your 1040 line 60.

Now that you have a withholding/payment target, you can adjust your withholding by completing a new W-4 with your payroll dept.
What to put on your W-4, the IRS has a calculator that can help estimate the correct withholding: http://www.irs.gov/individuals/artic...=96196,00.html

Or try the W-4 Assistant at Pay Check City: http://www.paycheckcity.com/W4/w4instruction.asp

[tednorris13]

Thanks for sharing that information. It's really good to know more about income tax without Make Work Pay Tax Credit.


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