BusinessWeek Publishes Misleading Article on Federal Withholding Changes in 2011
All taxpayers should be concerned about the impending expiration of tax cuts (from both the Bush and Obama years) but no one should have a heart attack reading BusinessWeek’s latest estimates of how much higher the taxes will be. They’re way too high.
In an article yesterday, BusinessWeek purports to show how much more will be withheld from each two-week paycheck this coming January, assuming all the tax cuts expire. They make several errors, though, so taxpayers should either wait for the official tables from the IRS or check out the Tax Foundation’s calculator at MyTaxBurden.org.
Since Congress has yet to act to extend any of the cuts, it is increasingly likely the IRS will release initial 2011 withholding tables to employers assuming that the cuts expire. This would result in smaller paychecks beginning next year.
BusinessWeek crunches the numbers and claims, for example, that a married couple making $80,000 per year would pay an additional $224.48 twice every month, for a total of $5,315.52 per year, and links to a calculator showing withholding changes for a number of different taxpayers. This claim is being repeated across the blogosphere.
This is an excerpt of an article posted on the Tax Foundation's Tax Policy Blog. To read the rest of the article, please click the link at the top of the post.
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