Are you currently employed? Not sure if your employer is withholding too much or too little Federal income tax from your payout? This Withholding Calculator can help determine whether or not you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate.
Use the Withholding Calculator if You Are:
- Changing your withholding tax amount to reduce tax refund or balance due
- In a situation where you are only approximated by the worksheets on the physical W-4 form (e.g., you have concurrent jobs, or you are a couple who are both employed; you are entitled to file as Head of Household; and/or if you have several children eligible for the Child Tax Credit)
- An employee with a non-wage income in excess of your adjustments and deductions and you prefer to have tax withheld from your paychecks instead of making separate payments periodically through the estimated tax procedures.
When You Use the Withholding Calculator, Make Sure You Have Your:
- Most recent pay stubs ready for reference
- Most recent (ITR) income tax return for reference
- Estimated values (Remember that results from the calculator are dependent on the accuracy of the information that you supply.)
Estimated Tax for Individuals:
IRS Definition: Estimated tax is the method used to pay tax on income that is not subject to withholding (for example, earnings from self-employment, interest, dividends, rents,alimony, etc.). In addition, if you do not elect voluntary withholding, you should make estimated tax payments on other taxable income, such as unemployment compensation and the taxable part of your social security benefits.