The Internal Revenue Service (IRS) claims that this is the time to decrease or increase your federal income tax withholding. All you have to do is follow its advice to get it right.
Bear in mind that having the right tax withheld isn’t a guessing game. Since the best moment to decrease or increase your tax withholding is now, let’s have a look at the things you should do and take into account.
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IRS suggests using its Tax Withholding Estimator
The IRS Tax Withholding Estimator tool is the best way to check if your tax withholding is right for your current personal circumstances. If you are an employee, there is an amount of federal income tax withheld from your monthly paycheck.
For your information, the amount of income tax an employer withholds from your regular pay depends on 2 different factors. On the one hand, it will depend on the money you earn.
On the other hand, the IRS claims that it will depend on the information you give your employer on Form W-4. Make use of the Tax Withholding Estimator to estimate the income tax for next year.
IRS Tax Withholding Estimator
To start using the IRS Tax Withholding Estimator you will need to visit its official website at: https://www.irs.gov/individuals/tax-withholding-estimator . Read all the given information before you start your estimate.
For example, if your job ends mid-year, you should not use the Tax Withholding Estimator because an error may occur. This is what usually happens when a job ends in the middle of the year, so it is best not to use it.
Another important tip to take into account if you change amounts is the following one. It is essential to refresh your browser if you change the amounts. By refreshing, you will start over again and there will be no errors. Results are as accurate as the info you enter.