Tax Credit About to Appear in Paychecks

That $400 (single), $800 (joint) tax credit promised in the recent economic stimulus package is about ready to start appearing. This tax credit will be spread out over 9 months, so it won’t be a huge improvement. But it is something. If you work for someone else, you will automatically see an adjustment. You won’t have to do anything — not even submit a new W-4. Your employer should adjust your withholding.

What to do if you are self-employed

If you have a home business, the story changes. You have two options:

1. Have your estimated taxes amount adjusted. You can learn how to do this by looking at IRS Publication 15-T.

2. Wait and claim it as a credit on your taxes next year. You can simply wait and claim it next year on your taxes. This is what I will do, since I’m already on track to make more this year, and without the credit my estimated tax payments are not likely to be sufficient.