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Tax credit questions and answers

November 17, 2009

Dealing with a taxing issue

More than 15.4 million people -- roughly 10% of all tax filers -- will owe more taxes than they expected because of the Making Work Pay tax credit.

Who's affected?

Mostly, people with more than one job, two-income couples filing jointly, and workers also receiving Social Security or pension payments. A single tax filer who held the same job all year should not be affected.

How can you find out if you have underpaid your taxes? The Internal Revenue Service has an online withholding calculator at www.irs.gov "> www.irs.gov to help figure out whether enough was withheld. Tax preparer H&R Block also has one at www.hrblock.com "> www.hrblock.com .

What can you do if you underpaid?

Adjust your withholding for the rest of the year to make up the difference. You also can make a payment to the IRS by Jan. 15 for the amount you think you might be short -- or simply wait until you file your 2009 taxes to settle up. The IRS said taxpayers would be able to get a waiver for any underpayment penalty caused by the tax credit.

Source: Times research

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