Fort Mill Times

Tax credit 'help' could be a burden

Editor's note: This guest editorial was originally published by the the Index-Journal in Greenwood and appears courtesy of the South Carolina Press Association's SC News Exchange.

Most South Carolina taxpayers have few illusions about the federal government's sleight-of-hand give and take where tax "refunds" and "handouts" apply. They've been through the mill enough to know that nothing comes without strings attached.

So, next April 15, when the taxman cometh, they aren't likely to be surprised when the "Making Work Pay" tax credit "help" will cost them. How? Paying more taxes.

The tax credit is supposed to provide up to $400 to individuals and $800 to married couples as part of the huge economic recovery package approved in February. Most workers started getting the credit through small increases in their paychecks in the past month or so.

There's a "but," though.

New tax withholding tables issued by the Internal Revenue Service could cause millions of taxpayers to get hundreds of dollars more than they are entitled to under the credit. That means taxpayers will have to ante up that money at tax time.

It's reported that at-risk taxpayers include married couples when both work; workers with more than one job; retirees who have federal income taxes withheld from their pension payments and Social Security recipients with jobs that provide taxable income.

There are, as always where taxes are concerned, variables to consider. One thing should be automatic, though: be prepared to face whatever comes up. In the long run that "help" may become a burden.

Withhold more or save to be able to pay - whatever - know what to expect. Ask an expert.

It shouldn't take anyone long to figure out there's no free lunch...no matter who promises what. And, with all the promises, bailouts and handouts that will cost taxpayers big time down the road, some will likely face the music over what they've already received.

Free money? Right!

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