The IRS has launched the “Tax Withholding Estimator,” an expanded, mobile-friendly online tool designed to make it easier to have the right amount of tax withheld during the year. It replaces the former IRS Withholding Calculator, and offers workers, retirees, self-employed individuals and other taxpayers, a more user-friendly step-by-step tool for effectively tailoring the amount of income tax withheld from wages and pension payments.
The Tax Withholding Estimator is designed to help those doing tax planning, and is especially important for anyone facing an unexpected tax bill or a penalty this year. It is an important tool for those who made withholding adjustments in the past year, or had a major life change. The Tax Withholding Estimator will help taxpayers who are most at risk of having too little tax withheld, including 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.
“The new estimator takes a new approach and makes it easier for taxpayers to review their withholding,” said IRS Commissioner Chuck Rettig. “This is part of an ongoing effort by the IRS to improve quality services as we continue to pursue modernization and enhancements of our taxpayer relationships,” he added.
The Tax Withholding Estimator offers a variety of new user-friendly features, including:
- plain language throughout the tool to improve comprehension;
- the ability to more effectively target at the time of filing either a tax due amount close to zero or a refund amount;
- a new progress tracker to help users see how much more information they need to input;
- the ability to move back and forth through the steps, correct previous entries and skip questions that do not 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 who has self-employment income in addition to wages or pensions;
- automatic calculation of the taxable portion of any Social Security benefits; and
- a mobile-friendly design.
Taxpayers can access the Tax Withholding Estimator from the IRS’s website, at https://www.irs.gov/individuals/tax-withholding-estimator.