You may have been surprised this year with your tax refund or with the fact that you owed taxes. It took everyone, especially employees with W2 withholdings, by surprise. The reason for this was employees did not have enough tax withholdings from their paychecks. Thankfully, the IRS has a tool called the IRS Payroll Withholding Estimator designed to help taxpayers determine the correct amount of federal income tax to withhold from their paychecks.
Using the estimator is simple and straightforward. Taxpayers enter their personal information, including their filing status, number of dependents, and other relevant details. The estimator then uses this information to calculate the correct amount of federal income tax to withhold from their paychecks.
Employers can also use the estimator to help their employees determine the correct withholding amount. This can be especially useful for employees who have recently had a change in their financial situation, such as a marriage or the birth of a child.
It’s important to use the IRS Payroll Withholding Estimator to ensure accurate tax withholding throughout the year. By doing so, you can avoid any unnecessary stress or financial burdens when it comes time to file their tax returns.
You’ll find the IRS Payroll Withholding Estimator under our IRS Quick Links. It’s called the IRS Withholding Calculator. If you need any help navigating the calculator or understanding your payroll tax withholdings, please feel free to email us at info@gratuscpa.com or call us (954)-998-1190. We’d be happy to help!
