Reply #36: Your post is so devoid of any facts,

[FrenchieCat]

until it is a real shame.

The tax cuts, THAT WERE PROMISED BY OBAMA ON THE CAMPAIGN TRAIL,
are part and parcel of a larger plan.

For you to "react" as though they are stand alone in their offering is myopic and ill served.

The way that the tax cuts, THAT ARE FOR MIDDLE AND LOWER WAGE EARNERS UNLIKE BUSH'S TAX REBATE,
are to be dispensed is via one's paycheck.

Per my calculation, and that of others, the tax cuts given by way of lowering tax withholdings would equal a 50 cent per hour increase in one's paycheck. That is not enough money to save, but enough for one to calculate into their budget, as it will not be a one time deal. That is a large difference from Bush's one time Tax Rebate offering.

In addition, there would be a EIC increase in the paycheck of those who don't make enough based on their withholding W4 claims, to have Income tax withholdings taken from their checks.

There is also additional ways that the tax cuts will be gotten to the self employed, retiree, and the unemployed:

Some of those items tentavely proposed (the whole plan has actually not yet been proposed) are:

For the Unemployed, an end to the taxing of unemployment benefits and extending unemployment benefits by 13 weeks.

For the Retirees and just all folks, doing away with IRA early distribution penalties for two years on the first $10,000 of IRA distribution

For Retiree specifically, increasing the ceiling of additional earnings before Social Security Benefits are taxed....which I believe is at $25,000 now, and would go up to $50,000 prior to taxing their SS benefits received, as well as not enforcing the 401K forced distribution to seniors if they choose not to (cause I guess 401K values have gone down, and some seniors would rather not touch it and make do--which I guess should be a choice which they didn't have before), but if they need it, any withdrawals made up to the required minimum amount will be exempt from taxation.

The Self Employed are figured into the equation as well, by allowing them to reduce their quarterly prepayment of estimated taxes by the tune of whatever the Tax cut is, $500 to $1,000 (jointly owned business with spouse).
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...under what Mr. Obama during his campaign called the Making Work Pay credit, worth up to $500 for individuals and $1,000 for families. The Obama campaign estimated that about 150 million Americans making less than $200,000 would qualify, including those who make too little to pay federal income taxes but would receive a check that would offset Social Security and Medicare payroll taxes.

Mr. Obama’s advisers said Sunday that they were searching for a way to get that credit into Americans’ pockets quickly to help stimulate spending, but would not duplicate the rebate checks sent last year as part of an economic package signed by President Bush. Instead, they said, they were discussing making the credit retroactive to the 2008 tax year and adjusting withholding formulas so that paychecks would start reflecting that right away.
http://www.nytimes.com/2009/01/05/us/politics/05spend.html?_r=1&hp=&pagewanted=all

The tax cuts that are being considered would equal $500 a year for working individuals and $1,000 for working couples. The cuts would be in the form of a payroll tax credit. That’s good news for workers because it’s an immediate benefit - no wait for IRS checks. Employers will make the adjustment during the year by reducing federal tax withholding; workers not subject to withholding will likely be able to apply for a refund at the end of the tax year. And yes, there will likely be phaseouts and caps - meaning at an as yet unmentioned income level, the credits would be reduced or not apply.
http://www.taxgirl.com/obama-proposes-tax-cuts-whats-in-it-for-you/

I trust that self-employed individuals will be allowed a similar $500 credit on the 2009 Form 1040 – so that they can reduce their quarterly estimated tax payment for the first quarter by $500.

It is touted as a “payroll tax credit”. My question is - Is it a credit against federal income tax or against actual payroll tax (FICA and self-employment tax)? I will be interested to see just how the mechanics of this credit will work, both now and on the 2009 Form 1040.
http://wanderingtaxpro.blogspot.com/