CA withholding more from your paycheck-'estimating' NEXT year's taxes--WAIT-they are JUST BORROWING!!
I believe that we get so focused on national news that we forget to keep our eye on local and state issues...
SACRAMENTO, CA - Come November, you may notice your paycheck is a bit smaller. As part of the state budget fix, lawmakers are "borrowing" future income withholding taxes in order to raise $1.7 billion for this fiscal year.
"It's not raising taxes. It's just getting the money, borrowing from you for a short period, non-interest bearing, and you'll get it back later," explained Sacramento accountant Ken Astle.
Astle said that taxpayers can file a DE-4 form to change withholdings and increase exemptions to compensate for the extra withholdings.Taxpayers will get their money back come tax time in 2011, unless they underpaid their withholdings.
In addition, the state is also requiring individuals and business that make estimated tax payments to pay more earlier - another accounting move that is designed to help the state balance its budget this year.
Critics charge that the state is only delaying the task of balancing the budget without accounting gimmicks.