Paycheck Checkup: IRS launches ‘Tax Withholding Estimator’
The IRS is encouraging everyone to use the Tax Withholding Estimator to perform a quick “paycheck checkup.”
This is even more important following the recent changes to the tax law for 2018 and beyond.
As part of a continuing effort to improve quality services for taxpayers, the IRS upgraded this tool, which replaces the Withholding Calculator, and gave it a facelift.
According to the IRS, the Estimator will help you identify your tax withholding to make sure you have the right amount of tax withheld from your paycheck at work.
There are several reasons to check your withholding:
- Checking your withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.
- At the same time, with the average refund topping $2,800, you may prefer to have less tax withheld up front and receive more in your paychecks.
More than just a name change
The Tax Withholding Estimator offers taxpayers a more user-friendly, step-by-step tool for tailoring the amount of income tax they have withheld from wages and pension payments.
More people with certain tax situations can use this tool than before, such as retirees and self-employed individuals.
The newly designed, mobile-friendly tool has plain language throughout to improve comprehension, and several new functions. You can learn more about key improvements in the attached materials.
Time is right
The IRS urges taxpayers to check their withholding each year and adjust it, if needed, to avoid tax filing surprises.
The new Tax Withholding Estimator will help anyone doing tax planning for the last few months of 2019.
It’s especially important to use the estimator now:
- If a taxpayer faced an unexpected tax bill or a penalty when they filed this year.
- If a taxpayer made withholding adjustments in 2018.
- If a taxpayer has or will experience a change in marital status, dependents, income or jobs this year.
- Because taxpayers can make estimated tax payments to the IRS instead of adjusting their withholding, and the next payment deadline is Sept. 16.
How you can help
If you previously linked to the IRS Withholding Calculator, you can update the link text on your website to reflect the new name, “IRS Tax Withholding Estimator.”
You don’t need to change the former URL, however.
The IRS will automatically redirect your users to the new tool from the former URL.