Easy peasy now takes on a whole new meaning. And stranger yet, it’s happening in the tax world. The IRS just launched a new IRS Tax Withholding Estimator. With efforts to improve services for taxpayers, the new Estimator replaces the old Withholding Calculator. I think we can all agree it was time for a facelift.
The product is more than just a name change. It’s a more user-friendly, step-by-step tool for tailoring income tax withheld from wages and pension payments. Now, even more people can use it, including retirees and self-employed individuals. The newly designed, mobile-friendly layout now has better plain language that even the less tax-savvy people can understand.
The IRS urges taxpayers to check their withholdings each year. It’s important to adjust it when needed to avoid any fun tax surprises. With the end of 2019 sneaking up fast, the new Tax Withholding Estimator will help anyone doing tax planning in time for year end.
It’s especially important to use the estimator now:
- If a taxpayer faced an unexpected tax bill or a penalty when they filed this year.
- If a taxpayer made withholding adjustments in 2018.
- If a taxpayer has or will experience a change in marital status, dependents, income or jobs this year.
- Because taxpayers can make estimated tax payments to the IRS instead of adjusting their withholding, and the next payment deadline is September 16.
See below for a helpful infographic regarding the new tool.