You’re right though, I could just reduce the allowances or I could just have them take out $30 or $45 per paycheck extra to offset the credit. Either way I would have to make an adjustment to my W4. Luckily for me that’s an online for with my employer so the process is very simple.

Thanks for the link.

Still, I made a recommendation on how to avoid having too much taken out (reduce allowances). I can’t explain why you’d get more than the supposed $15 a week the plan is supposed to give back.

But to help fix it…try this:

http://www.irs.gov/individuals/article/0,,id=96196,00.html

I’m not about giving the government any more of my money than I’m obligated to do. I don’t want a “big fat check.” I will not just spend it because it’s there.

We live on a very strict zero balanced budget so every penny is put somewhere before pay day. I’m not concerned with my number of allowances. They are at the correct level for keep my money and still get $500 refund.

I’m only concerned with the impact of the credit. It’s supposed to only be $800 per couple and it appears we are getting significantly more than that on my paycheck alone, much less my spouses.

I did not intend for this to be about whether or not you get a big refund or keep you money throughout the year, that a whole other topic to discuss…well really it’s just about whether or not you disciplined enough to save you money or not.

I look at the refund as a “bonus” for being smart. I learn to live on a reduced income, I have to manage my savings with more money being sent to the government, but then I get a nice fat check once a year for being good with my money.
Sure, the government gets an interest free loan – but the amount of money I’d make if I ACTUALLY saved the cash is minuscule – something like $200/300. Sure, money’s money. But I’d rather get the big fat check. Then I save a portion and spend a portion.

When I look at my pay stub, I see a $62 increase. I am paid bi-weekly so that means there are 19 more paychecks this year which would mean an additional $1,178. This is a lot more than the $800 per couple. This doesn’t include any increase on my spouses pay!

What gives? Is this impacted by how many allowances I claim on my W4? Earlier this year I increased my allowances to avoid a big refund next year. Wanted to be around $500 instead of $2,500, so used the IRS and employer calculators and tax tables and both indicated that I needed to change from 2 allowances to 6. I’m ok with breaking even but I’d like to not owe anything.

Any ideas?

Particularly now. “Stimulus” is just more borrowing by the government. In fact, the incremental additions to each paycheck simply increases government debt because the no interest loans they once received are now much diminished. At least a portion of the lump sum payments we got were offset by interest rate gains. The assumption with the incremental addition is that a “spark” of economic activity will offset the loss of no interest loans.

No such luck. I actually spent my stimulus check last year – hard goods are suffering most, and I wanted a new TV since they were getting cheaper so rapidly. Unfortunately, the incremental paycheck stimulus will only serve to increase prices on goods that we complain about most – gas, food, clothes. Lump sum payments were usually spent on larger goods, which are less visibly inflationary.

There will be no spark from this, because it is not well designed, as usual.

1. IF the economy is “turning the corner” (something I thought 3 months ago, now I’m less sure of due to the near doubling of the US debt load by the administration), it was doing so of its own accord – not due to a stimulus.
2. IF the economy is to “turn the corner”, it has to do so on the back of real growth development, not credit based growth development (such as a stimulus borrowed on the future)
3. IF consumers wish to dig their way out to a better tomorrow, they cannot rely on the government to help them do it, nor should they. It’s fool’s gold.

The “stimulus” may give a short term boost (who knows when or if it will, but politicians like to claim victory when non is visible), but the reality is something quite different – we face larger and more damaging deficits as a result. For all the rhetoric Obama has laced the Bush administration with regarding fiscal irresponsibility, his first 3 months make Bush look like a piker.