I gave some advice to a friend recently and wanted to share it with others. Remember that the government is withholding fewer federal taxes from your paycheck this year but that doesn’t reduce your tax burden payable April 2012. It is a money shuffle game that has been played before: you get more throughout the year to spur spending/buying but you will still be responsible to pay the tax burden that you normally owe.
It is extra cruel for my friend who doesn’t save throughout the year so he gets the tax bill shock because the withholding was so low.
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