Federal Income Tax Rates Went Down but Your Federal Tax Withholding Increased. Here’s Why…

186 Responses to “Federal Income Tax Rates Went Down but Your Federal Tax Withholding Increased. Here’s Why…”

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1. 151
   Norman L Wiechnick Says:
   February 10th, 2011 at 8:20 am

   Hey Pete,
   Read your own reply. You DID benefit from the “MAKING WORK PAY” tax break so what’s your problem. Now that’s it’s ended your complaining about the deficet created by Republican greed and stupidity? I agree with you.

   147 Pete Says:
   February 7th, 2011 at 6:03 pm
   Norman L. Wiechnick, unemployment is at 9.0%, the deficet is 1.5 Trillion. How did I benefit from Working Work Pay when I am now paying $50.00 more in Federal Withholding Tax.

2. 152
   gladys of vt Says:
   February 10th, 2011 at 8:57 pm

   thanks for all the comments. thought i was seeing things. penion showed increase of $16 but total deposit $29 decrease. state tax increase 58 cents. the problem was with the $35 federal tax increase. thats $29 decease each month. i was told ,the federal tax table increased.
   the solution as i see would be to not have any state or federal withheld from the penion. then not pay H&R block $150 to do the simple and short income tax, i am old, forgotten and off the radar. hopefully they’ll still deposit my check. thanks for sharing!

3. 153
   Robert Says:
   February 12th, 2011 at 12:22 am

   I still don’t get it. Congress passed the so called “BUSH” tax cuts in late December. What does taking out more income tax beginning in March have to do with “keeping the rates the same”. How does a “cut” increase the taxes?

4. 154
   Ken ODell Says:
   February 13th, 2011 at 10:08 am

   Taxes have become confusing and full of loop holes. The average person has a hell of a time trying to figure out all of this tax stuff . When are we going to get a simple tax program ( a flat tax etc.)that will make life simple! We shouldn’t have to dread tax time every year wondering whats changed and how much to pay.

5. 155
   cm Says:
   February 15th, 2011 at 11:04 am

   I’m very confused. People were complaining about the Bush Tax Cuts and now they are complaining because the tax cut is now gone.

   @Carol — sorry to hear about the pension situation. No increase ever? That’s terrible. Part of the problem is that the government rapes private companies. This is one of the reasons I’ve considered going to work for the feds. Like last winter with all the snow — nice 4 1/2 days off *with pay* — private companies cant afford that luxury. But they can — just keep sticking it to private businesses.

6. 156
   cm Says:
   February 15th, 2011 at 11:27 am

   @Pete:

   1) You’re right — we do get 99 weeks unemployment. I retract that part. Also, didn’t want you to think I am minimizing the fact that some retirees have trouble making ends meet. However, many of the comments in this thread make it sound like they are the *only* ones who have financial problems. That’s the part that I find over the top.

   2) Do not want to give the impression that I was not doing anything about my current situation. A few years ago, I had planned on retiring from here. Unfortunately, this extended recession has changed all that. My situation has a couple of challenges:
   * My age (1 1/2 years away from 50)
   * The need to upgrade my skills to make myself more marketable — currently taking classes but with a full time job it’s going to take a while.
   * Outsourcing

   3) And yes, I’m not getting SS because I haven’t been contributing for 40 years. It was not my intention to make it look like I thought I deserved this. (Mea culpa if my post was a little bit unclear about that.)

   However, I have been contributing since 16 (more than 30 years already). Currently, people my age can start collect at 67, but must wait until 72 to get full benefits. That’s a total of 56 years for me. And the problem is that SS is going to be bankrupt soon. I will have been contributing about 40-45 years and they’re going to say to me, “Sorry, we don’t have any money for you.” That’s the part that’s not fair.

7. 157
   Carol of Michigan Says:
   February 15th, 2011 at 12:24 pm

   @cm: NO INCREASE ON OUR PENSIONS EVER! I repeat: “cm: Our company pensions are FIXED!!! There is NO provision for inflation on our company pensions EVER!! When we have to pay additional Federal taxes on our company pensions, we are left with less to live on!! Our Social Security income is much less than our FIXED company pensions AND SS has not been increased for the last two years. Even when SS has been SLIGHTLY increased for inflation, most of the increase was taken away to pay the every increasing MANDATORY monthly MEDICARE payments.”

   The continuation of the Bush Tax cuts PRIMARILY helps upper income people, period!! The now lowering of the FICA withholding tax by 2% on current workers offsets their increase in Federal Income tax that is due to letting the Making Work Pay Tax Credit expire. Letting the “Making Work Pay Credit” expire increases Federal Income Tax for all but PRIMARILY hurts us lower income tax payers that are retired and because we are retired we no longer pay into FICA and thus do not get the benefit of the FICA 2% decrease that current workers get that offsets their increase in Federal taxes due to the elimination of the Making Work Pay Tax Credit for all. The end result is retirees are seeing an increase in Federal Taxes being taken out of their FIXED pensions; thus, we are getting shafted!

8. 158
   Carol of Michigan Says:
   February 15th, 2011 at 12:44 pm

   @Robert: See my comment to cm above. Also, The “Bush Tax Cuts” has nothing to do with the increase in our Federal Income Taxes. The Bush Tax Cuts are primarily for the upper income folks. The Federal Income Tax increase to us lowly tax payers is because the “Making Work Pay Tax Credit” was allowed to expire in December 2010. All in all we are talking about 3 different things that contributed to changes in our taxes.
   (1) Bush Tax Cuts Continue for higher income folks
   (2) Making Work Pay Tax Credit Expiring for all
   (3) The 2% Decrease in FICA witholding for the currently employed but this decrease does not help retirees.

9. 159
   Jimmy Hanchey Says:
   February 15th, 2011 at 2:47 pm

   THE TAX SITUATION IS LIKE A MERRY GO ROUND AT A CIRCUS. LOOK AT THE MILLIONS OF TAX PAYERS THAT PAID INTO SOCIAL SECURITY AND DIED BEFORE THEY RECIEVE ANY BENEFITS. MY FATHER PAID INTO SOCIAL SECURITY FROM THE ONSET, HE DIED AT 62, MY MOTHER DID GET HIS BIG DEATH BENEFIT OF $255 DOLLARS. SOCIAL SECURITY WOULD BE SOLIVENT IF THE POLITICIANS HADN’T ROBBED IT SEVERAL TIMES. THE BIGGEST FINICIAL CRUMBLING OF THIS COUNTRY STARTED WHEN NAFTA WAS SIGNED INTO LAW. THE GOVERNEMET THEN STARTED BORROWING TO COMPENSATE FOR THE MILLIONS OF LOSS MANUFACTORING JOBS. WE CAN ONLY OVER COME THE TAX AND DEBT CRISIS,IF WE PLACE HEAVY TAXES ON IMPORTS AND START PRODUCING AND MANUFACTORING AGAIN. AMERICAN TAX PAYERS CAN’T PAY IN ENOUGH TAXES TO FUND ALL THE GOVERNMENT PROGRAMS WE HAVE TODAY.

10. 160
    Linda in Ohio Says:
    February 15th, 2011 at 3:04 pm

    I just filed 2010 taxes and noted that the Making Work Pay credit IS claimed when you file your taxes. This is contrary to the explanation we were previously given which stated as follows:
    “For starters, the Making Work Pay tax credit has expired. Unlike most income tax credits, which can be claimed when you file your taxes, the Making Work Pay credit was given out incrementally via reduced federal income tax withholding during 2010.”
    This being the case, it does not make sense to take more out via federal income tax withholding for 2011.

11. 161
    cm Says:
    February 15th, 2011 at 5:01 pm

    @Carol — that’s why I said “That’s terrible” in my post — because I am empathizing with your situation. I have absolutely no idea why you feel I was making light of your situation. I have no idea why you feel it’s necessary to SCREAM at me in ALL CAPITALS! And then repost what you said before.

    In hindsight, I do feel that some of the comments in my first post were a bit unconstructive. That’s why I tried to make up for it in the second post and take on a more positive tone. That’s why I retracted some of my comments in the second post. That’s why I clarified my comments where people felt that I thought I was already entitled to SS.

    Obviously I missed the mark — because your hostile tone in response to my second post clearly set you off.

12. 162
    Carol of Michigan Says:
    February 16th, 2011 at 12:38 am

    @cm: I didn’t feel you were making light of my situation. I interpreted your comment as a question: “no increase ever?” Thus, I felt I needed to clarify. I did not intend to shout at you. My use of caps meant only to answer your question and express my frustration with the unfairness and sneakiness of our politicians taking out more taxes from retirees. It also expresses my frustration of becoming distrustful of our politicians with their current talks of reducing the deficit by reducing our Social Security. All of this is not making this lady a happy camper. No offense was not meant toward you, cm. Offense is directed at the politiicans regarding this issue.

13. 163
    Ken ODell Says:
    February 16th, 2011 at 7:14 am

    Jimmy H…..You hit the nail on the head and until we get back to producing more than we consume we’re going to have big problems! Our government has become an out of control spending monster. Like an elephant in a vegetable garden.

14. 164
    cm Says:
    February 17th, 2011 at 11:01 am

    @Ken ODell — you are absolutely correct. Many people contribute but do not receive. Your father is a prime example. This happens a lot to Men and African Americans because of their shorter life spans.

    Soc Sec is a Ponzi Scheme that’s about to go bankrupt. Some people collect waaaay more than they put in. A prime example is Ida May Fuller — the first person to receive a Soc Sec check. In 1937, 1938 and 1939 she paid a total of $24.75 into the Soc Sec System. Her first check was for $22.54. After her second check, she had already received more than she contributed over the three-year period. She lived to be 100 and collected a total of $22,888.92.

    Soc Sec is so unfair. Some people (like your father) get nothing despite years of contributions. (Your mother got something, but it sounds like it was a pittance compared to his contributions.) Others (like Ida May Fuller) hit the jackpot — more than 900 times what they put in.

15. 165
    Rick Messer Says:
    February 19th, 2011 at 2:47 pm

    Why is the republican party not screaming to pass the fair tax? The IRS doesn’t even know how to interpete there on rules.

16. 166
    Rich Says:
    February 20th, 2011 at 1:09 pm

    When the 1st year of this credit took place, I increased My federal withholding $20 to compenstate for some of the possibility of not having enough took out since I also work a part time job, I was advised this by a tax specialist. Yes, I did benifit from the Making Work Credit when filing. With the break going away for when I file next year, I simply let the + $20.00 continue on, because taxes always go up anyway, & I have no dependants, & on My $25,000 a year – I’m in a higher tax bracket. Near 25% of My total income, is taxes. Yes, it’s kinda unfair to be in a lower income, working 625 more hours a year over the regular 2,080 to make that $25,000 & having higher taxes – it is what it is & don’t think it’s ever going to change. There can be a price on lower incomes, it just depends on what Your filing situation is.

17. 167
    Ken ODell Says:
    February 22nd, 2011 at 11:20 am

    As our government continues to grow, so will our tax burden. Something has to give.

18. 168
    tom Says:
    February 26th, 2011 at 7:39 pm

    Everyone should quite complaining! If it wasn’t for the Republican’s using the excess income from Social Security (over $2.5 trillion since 1983)and borrowing another $10 trillion we would not have been able to allow Wall Street hedge fund managers to pay taxes at a 15% marginal tax rate, we would not been able to have our Wall Street financial wizards to make billions selling stale mortgages, and we would have had in place regulatory rules that would have prevented other financial genius�s from pulling down billions while placing the bill squarely on the backs of the American taxpayer. Just think where we would be today if the wealthiest Americans had to pay their fair share of taxes and the country’s financial industry was force to play by the same rules the rest of us have to play by. The Republican�s have favored the few who are better and smarter than the rest of us so we could all be lifted up from the wealth that those much smarter than us create. Don�t worry some of that wealth will eventually trickle down to the rest of us.

19. 169
    Shirley Says:
    February 26th, 2011 at 7:46 pm

    I rec’d my pension check today and was shocked. I didn’t know why they took $42 extra federal taxes out. The state remained the same. I get single annuity for the rest of my life, so my gross distribution will never change. I work part time at H&R Block and a few credits will be disappearing on our 2011 returns. We received making work pay in 2009 and 2010, but will not in 2011. Also, the child tax credit will go from $1000 to $500. What a bite …

20. 170
    Ken ODell Says:
    February 27th, 2011 at 7:49 am

    And this forum was going pretty good………

21. 171
    Lynn Says:
    March 1st, 2011 at 12:59 pm

    Dear Goverment,

22. 172
    Lynn Says:
    March 1st, 2011 at 1:07 pm

    I may need to diet but why is the goverment taking away my ability to buy food, medicine and pay my bills. Why doesn’t the goverment just give us a pill and let us go on out. Then they can have all of the money we worked 40 years to get. Screwed! HELL YES.
    Thank you to all the the goverment officials. Not one of you is without blame. I bet your Mothers do not tell their friends where you work becaue all of their friends are retired also.

23. 173
    Ken ODell Says:
    March 1st, 2011 at 1:47 pm

    We need a tax system that doesn’t favor certain income brackets and doesn’t create loop holes. Every person that makes a dollar should pay the same amount per dollar regardless. No itemized-deductible-make work pay-child credit-earned income bull#@!. Something that is fair to everyone. ALL americans,including our representitives and leaders,should be under the same set of rules.

24. 174
    Rooty Says:
    March 7th, 2011 at 11:48 pm

    Everyone, The tax rates are the same for most taxpayers in 2011, with slight favorable adjustments in the tax brackets and Standard Deduction. As a retiree on Social Security (SS), I did not receive reduced witholding in 2009 or 2010 because of the Making Work Pay Credit. I like others on SS received a one time payment of $250 in 2009. The increased $50/ mo witholding for 2011 is either a mistake by the Obama Adm. in applying the increase to those who did not benefit from the decrease, or, it is purposeful trick. The solution is to file a revised W4 to adjust your SS witholding back to what is has been.

25. 175
    Jill Says:
    March 14th, 2011 at 5:14 pm

    I still don’t understand, I pay into PERA so I don’t pay social security tax. My Fed. tax rate went up and I am now taking home less, in this economy it is huge since I only now get home with $1,250.00. Does the Bush cuts not effect me?

26. 176
    eileen Says:
    March 26th, 2011 at 12:39 pm

    Well, those of us on fixed incomes (pensions) actually lose when SS kicks in because they lower your pension to compensate for the fact that you can finally get SS that you paid in to for years. Now, taxes continue to increase, government talks about “going green on energy” which is costing and will continue to cost and the gas at the pump goes up and up and up. But us, we drill in Brazil. Why help our people…let’s help another country. Makes sense, right…wrong. Let’s begin to help our own at home first. Stop blowing smoke and begin to tell us the truth.

27. 177
    Bobbie Says:
    March 29th, 2011 at 8:03 am

    Just read an article in our local paper that said all of our “extra spending money” was now going into the gas tanks. Well, I have news for them….there was no extra spending money for us any way. With the MWP tax gone and our fed. taxes back to old rates, the tiny 2% off of my soc. security deduction was gone and then some. My job has dwindled to 20 some hours a week, my husband is disabled due to a stroke and has seen no increase in his soc. sec. check and even if you do it is only 10 or 12 dollars. In order to have the $1000 to $2000 a year savings our president said that MOST Americans would recieve from the 2% decrease in soc. sec. tax, you also have to MAKE $1000 to $2000 A WEEK to see that kind of savings. Obviously, he wasn’t talking about people who live where I do. No one in the government has a clue how the average and below average person lives. They truly believe their own fantasy world that we are all going to have a $1000 plus to spend this year and no, I do not remember hearing them ever say that oh, by the way ,your fed. taxes will go up to cancel it all out any how this year. I am 10 years from retirement age for full soc. sec. benefits… there are no jobs here so I stay where I am in order to have some job. I don’t dare get sick because I have no health insurance and can’t afford any. I think they should all be made to live this life foe a while in order to qualify for running for any office, Republican or Democrat.

28. 178
    Karen Says:
    April 3rd, 2011 at 1:39 pm

    I can’t believe that I only make $12.33 an hour and I am bringing home ~$200 less that I was every two weeks……….I BARELY MADE IT BEFORE………I went to Payroll and said, “what the heck”? Then as we went thru it I saw the increase…..$25,646 a year and I am paying $178.17 every two weeks in fed. witholding, SS, and Medicare taxes, THEN another $35 for insurance..=$213.00 every two weeks..the government is CREATING MORE POVERTY. I just got an $.18 an hour raise that is included in these figures….didn’t make any difference the government takes it…….. This is CRAZY. Try LIVING on $1586 a month, single, NO CC debt….buy groceries, pay rent, car insurance, gas…only the basics…AND yes, I DO know that I am luckier than some………more poverty….crap rolls down hill and as soon as the government realizes that although unemployment is ‘down’ for the month, but there are still millions out there who have run out of benefits and are still not working….the crap will hit the fan. Where do they get off manipulating numbers? Those people COUNT… I truly believe we are headed for a recession/depression….”If you aren’t outraged, you aren’t paying attention.”

29. 179
    Jane Says:
    April 7th, 2011 at 11:13 pm

    I received a notice in the mail stating “Changes to the tax tables for 2011 may have altered the amount being withheld for federal income tax.” What was the reason for the change to the tax tables?

    The amount of my pension decreased by $65/mo.

30. 180
    Dean Says:
    July 3rd, 2011 at 10:41 am

    Just notice, they are taking out $32.92 more out of my fed tax this year then last….this started in Feb…what is up with this…this is off my pension check of $504.00…

31. 181
    Ron Says:
    December 19th, 2011 at 10:31 pm

    If you are a retired Social Security recipient, you did not receive a COLA adjustment in 2010 or 2011. This obviously created the funds to supplement wage earners “payroll tax holiday”. How about a big thank you to the retired Moms and Dads for that sacrafice, because that tax break didn’t cost the government a dime. Project the benefit of those two years of zero COLA at a rate of 3.5% a year times 55 million recipients times the remaining years of their lives, and the government has secured what could be billions if not trillions into the Social Security Trust Fund (or where ever else they would like to use it).

32. 182
    Ron Says:
    December 20th, 2011 at 2:12 am

    And by the way, Social Security COLA was denied in 2009 also, but a one time $250 payment was made. That amount may have equated to a 3% raise for 2009, but not for the remainder of the Social Security recipients life, as a 3% COLA adjustment would have. So the government will realize the same massive windfall from denied COLA’s for 2010, 2011, and 2009 (less the onetime $250 payment in 2009). This savings alone will offset a large part of the massive debt buildup required to clean up the Bush era insanity. Again, someone needs to give a big thank you to America’s Social Security recipients for their generosity in helping resolve Americas massive debt crisis.

33. 183
    Artemis Says:
    December 30th, 2011 at 9:14 am

    I didn’t qualify for the “making work pay credit” and also had to pay back the IRS the last 3 years and I make just shy of 30K a year, so this is taking almost $100 out of my monthly check for someone else’s pocket because the ones in charge can’t bear to give up their paid-to-be-useless salaries. If Congress wants to make some serious tax money, put it on stuff like cigarettes, beer, junk food and designer clothes, not on groceries and peoples’ hard-earned income. I understand we wouldn’t have things like emergency personnel, road repairs or schools without taxes, but again, those taxes should not be on things necessary to survive – and when the economy goes south it should not be the public-at-large who has to take it in the shorts.

34. 184
    bw Says:
    January 13th, 2012 at 11:37 am

    call your congressman

35. 185
    julie Says:
    January 27th, 2012 at 3:25 pm

    I feel sorry for all the people out there that are ignorant enough to blame Obama for all their problems.

    1) presidents pretty much have little to no control over the government (they’re talking heads)
    2) every good thing Obama tried to get passed was blocked by the GOP.
    3) face reality.. wall street controls everything!

    Watch Jon Steward and you’ll understand things better

36. 186
    pjd Says:
    January 27th, 2012 at 4:38 pm

    Why would I take political advice from a stand up comic? We already have a comedian in the White House.

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