IRS issues tips for using the withholding calculator

The IRS recommends that employees use the Withholding Calculator at to do a “paycheck checkup” to check that their employers withhold the correct amount of income tax from their paychecks.
The Withholding Calculator can help prevent employees from having too little or too much withheld from their paycheck. Having too little tax withheld can mean an unexpected tax bill or potentially a penalty at tax time in 2019. And with the average refund topping $2,800, some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks. Here are some tips for using the Withholding Calculator. Employees should:

  • use their most recent pay stubs and federal income tax return to help estimate income and other items for 2018. Keep in mind the new tax law made significant changes to itemized deductions,
  • fill in all information that applies to their situations,
  • make estimates when necessary, but keep in mind the results are only as accurate as the information entered,
  • check the information links embedded in the program whenever employees have questions, and

Print the final screen that summarizes their entries and the results. Use the results from the Withholding Calculator to determine if a new Form W-4, Employee’s Withholding Allowance Certificate, should be submitted. (IRS Tax Reform Tax Tip 2018-46, March 27, 2018.)

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