The Withholding Calculator is a tool that is very useful to employees when it comes to helping them determine whether or not a new Form W-4 needs to be filled out and returned to the employer.
The purpose of Form W-4 is to insure that you are not having too much or too little federal income taxes taken out of your paycheck. Once you have used the withholding calculator you will be able to use the results it gives you to aid you when filling out the Form W-4.
Who Is The Withholding Calculator Beneficial To?
- Employees who have situations that are approximated by the worksheets on the paper version of W4.
- Employees who have non-wage income in excess of their adjustments and deductions who would like to have taxes withheld on their paychecks instead of having to make estimated tax payments throughout the year.
*Keep in Mind: If you will be subject to alternative minimum tax, self-employment tax or any other taxes it is in your best interest to calculate your withholding by using the instructions found in Pub 505: Tax Withholding and Estimated Tax.
Using the Withholding Calculator
Before you access the withholding calculator make sure you have all of your most recent pay stubs together. Also, make sure you have your most recent tax return together. Lastly, only estimate values when absolutely necessary. You have to keep in mind that the results given from the calculator can only be as accurate as the information that you are inputting into it.
After you have gotten your results if it is determined that you need to change your withholding amount you are going to have to complete a new Form W-4 and then submit the completed form to your employer.
Let TurboTax Help You File Your Taxes
If you go to TurboTax online when it comes time to file your taxes you will find that tax season will be a whole lot easier for you. You don’t have to know the tax code. Instead all you have to do is answer a few simple questions regarding your tax situation and TurboTax will handle the rest. They will make sure that you get all of the tax deductions and credits that you are entitled to while allowing you to keep the most of your hard earned money. You can even use the free tax refund calculator to see how large your tax refund is going to be.