The IRS is strongly encouraging everyone to perform a “paycheck checkup” due to recent tax law changes. The Withholding Calculator helps you make sure you have the right amount of tax withheld from your paycheck.
According to the IRS, 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.
What You Will Need
The Calculator will ask you to estimate values of your 2018 income, the number of children you will claim for the Child Tax Credit and Earned Income Tax Credit, and other items that will affect your 2018 taxes.
- Gather your most recent pay stubs.
- Have your most recent income tax return handy; a copy of your completed Form 1040 will help you estimate your 2018 income and other characteristics and speed the process.
- Keep in mind that the Calculator’s results will only be as accurate as the information you provide. If your circumstances change during the year, come back to this Calculator to make sure that your withholding is still correct.
- The Withholding Calculator does not ask you to provide sensitive personally-identifiable information like your name, Social Security number, address or bank account numbers. The IRS does not save or record the information you enter on the Calculator.
For taxpayers with more complex tax situations, like those who owe self-employment tax, alternative minimum tax, the tax on unearned income of dependents, use the instructions in Publication 505, Tax Withholding and Estimated Tax.
Change Your Withholding
Results from the calculator will include a recommendation of whether or not you should consider submitting a new Form W-4, Employee’s Withholding Allowance Certificate, to your employers. If you decided to change your withholding, complete a new Form W-4, and submit the completed Form to your employer as soon as possible.