The new IRS Tax Withholding Estimator provides you with precise easy to figure withholding info
Posted on August 16, 2019
At Teipen Selanders Poynter & Ayres, we’ve been recommending that our customers do a paycheck withholding check-up mid-year to make sure they have the right amount of tax withheld so there aren’t any tax surprises come April.
The IRS just made this check up much, much easier with an expanded, mobile-friendly online tool designed to make it simple for everyone to calculate the right amount of tax withheld from each paycheck.
The new Tax Withholding Estimator replaces the former Withholding Calculator. The new estimator tool offers workers, retirees, self-employed individuals, and others, a more user-friendly step-by-step tool for effectively tailoring the amount of income tax you have withheld from wages and pension payments.
The IRS took the feedback and concerns of taxpayers and tax professionals while developing the new Estimator. The result is a variety of user-friendly features including:
- Mobile-friendly design.
- Easy to understand (non IRS jargon) to improve comprehension.
- A way to effectively target a tax due amount close to zero or a refund amount.
- A progress tracker
- The ability to move back and forth to correct previous entries and skip questions that don’t apply.
- Enhanced tips and links to help the user quickly determine if they qualify for various tax credits and deductions.
- Self-employment tax for a user with self-employment income in addition to wages or pensions.
- Automatic calculation of the taxable portion of any Social Security benefits.
The CPAs at TSPA have taken a look at this new Tax Withholding Estimator and found it makes it very easy to enter wages and withholding for each job held by the taxpayer and their spouse, as well as separately entering pensions and other sources of income.
At the end of the on-ine session, the new estimator makes specific withholding recommendations for each job, each spouse and clearly explains what the taxpayer should do next. “It’s very user friendly,” says Mike Poynter, a CPA at TSPA. “It will help anyone doing tax planning for the last few months of 2019.”
Who should check out this tool? Anyone who faced an unexpected tax bill or a penalty when they filed this year, or who made withholding adjustments in 2018, or had a major life change (such as a marriage, divorce, new baby, or a job change with income fluctuation.