Adjusting your tax withholdings using the IRS Withholding Calculator is a great way to ensure you withhold the correct amount of tax from your paycheck. I highly recommend a "quarterly tune-up" to make sure you stay on track with your income tax withholdings (also known as tax liability) to avoid any unexpected surprises during tax filing season. Every taxpayers situation is different so be mindful that there's no "One Size Fits All" when it comes to filing status. Here’s a step-by-step guide:
Step 1: Gather Necessary Information
You’ll need:
Your most recent pay stub(s)
Your most recent tax return
Details about other sources of income (if applicable)
Information on your expected deductions, credits, and filing status for the year
Step 2: Access the IRS Withholding Calculator
Visit the IRS website and search for the "Tax Withholding Estimator" or access it directly.
Click on the estimator and follow the prompts.
Step 3: Complete the Questionnaire
The calculator will ask you for:
Filing Status: Single, Married Filing Jointly, etc.
Income: Enter your annual income, pay frequency, and tax withheld to date.
Adjustments and Deductions: Include anticipated itemized deductions or the standard deduction, IRA contributions, and education credits.
Step 4: Review Results
The estimator will show:
If you’re on track to withhold the right amount for the year.
If you need to adjust your withholdings to avoid a large refund or tax bill.
Step 5: Adjust Your Withholdings
Fill out a new Form W-4 (available on the IRS website or from your employer).
Submit the completed Form W-4 to your employer's HR or payroll department.
Tips
Check your tax withholdings early in the year or after major life events (marriage, birth of a child, or after a job change).
Revisit the calculator periodically, especially if your financial situation changes.
コメント