A NEW INCOME

A New Income Q&A

Q: How do I respond to person who claims the new federal withholding raised his tax liability?

I have a friend who claims the new federal withholding rules increased his tax liability on his 2009 return. His income, plus other circumstances, changed very little from the previous year, yet he claims he's paying higher taxes this year, He's blaming it on the change federal withholding that somehow screwed up the numbers and hiked his tax liability. He insists he's not mistaking a lower tax return that resulted from the lower tax withholding as evidence of an increased tax liability. This is how he explained how the changed in withholding changed his tax liability: "the way it increased my taxes was that the amount that my income was previously reduced by $3000 or whatever it was was reduced by less this time because they played around with the numbers and moved a chunk into another box which still added up to the same ~$3000 but messed with my total taxable income." His explanation doesn't make an;y sense to me, but maybe it does to someone else? At any rate, if his claim is bogus, what do you suggest for a response that removes all doubt that he is wrong?

A: You can't argue with some idiots. (Some clowns actually believe the "death panel" BS in healthcare reform or that 9/11 was an inside job. They will never be swayed by facts.) Ask him to show you copies of his 2008 and 2009 tax returns. If the 2008 income is the same as the 2009 income, the total tax after the Making Work Pay credit will be lower for 2009 than 2008.

A New Income Q&A A New Income