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Author: dwade Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121570  
Subject: Re: New Soc. Sec. Base Rate Date: 10/22/1997 4:48 PM
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>[...]Exactly correct. There are potentially millions or overpaid tax dollars due to this problem. With the advent of computer programs (such as Turbo Tax) where the individual is required to enter his/her W-2 information, the overwithholding is caught by the computer. [...]

I just wanted to mention a very similar situation: In California there's a state disability tax that's has a cap of around $250, and sure enough just like the social security tax each employer starts over and if you switch jobs it's very easy to have paid too much. So there's some line on a form where you can subtract out excess SDI, but unless you *know* there's a cap and add up your W2 values it's very easy to miss.

In fact, I *did* miss it in two years (93,95?) because MacInTax doesn't do it for you! I don't know if other tax programs catch it, but since Turbo Tax is also from Intuit it's quite possible there's common code with the same flaw. Luckily I noticed it myself for '96 and was able to add it in manually. Even better, not long thereafter California actually ran through people's returns for the last three years and sent surprise refunds so I never had to figure out how to refile ammended state taxes.

I don't know if other states have similar issues, but it's worth keeping an eye out for that kind of thing. It also shows that those programs aren't perfect and it's well worth keeping an eye on what they're doing.

Doug
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