IRS launches new Tax Withholding Estimator online tool
The Internal Revenue Service is alerting the payroll community about today’s launch of a new IRS Tax Withholding Estimator online tool. It replaces and expands the old IRS Withholding Calculator.
The new tool offers a robust, mobile-friendly, step-by-step way for workers, as well as retirees, self-employed individuals and others to tailor the amount of income tax withheld from their wages and pension payments.
In designing the Tax Withholding Estimator, the IRS listened carefully to the concerns of payroll professionals and other stakeholders. As a result, the new tool
The ability to more effectively target either a tax due amount close to zero or a refund of around $500.
The ability to calculate self-employment tax for a user who has self-employment income in addition to wages or pensions.
Automatic calculation of the taxable portion of any Social Security benefits.
Like last year, the IRS urges everyone to do a Paycheck Checkup and review their withholding for 2019. This is especially important for taxpayers who faced an unexpected tax bill when they filed this year, those who have a major life change in 2019.
Those most at risk of having too little tax withheld include those who itemized in the past but now take the increased standard deduction, as well as two-wage-earner households, employees with nonwage sources of income and those with complex tax situations.