Avoid Tax Debt With This IRS Tool
Few things are worse than an unexpected tax bill. If you’re still not happy with the recent tax surprise – or if last year’s turmoil changed your personal circumstances – now is the perfect time to turn to the IRS paycheck tool to help you fine tune your taxes. withholding and preventing any trouble for the 2021 tax year.
According to the IRS , it is especially important to go through a paycheck if there have been major changes in your life recently that could affect your taxes – for example, getting married, having a child, adopting a child, or buying a house.
The IRS also reports that some taxpayers – such as two-income families with seasonal jobs or those who take into account tax deductions – may be more likely to withhold the wrong amount.
What do you need to check your salary
Before you start, you need to have a few things on hand: payroll receipts for you and your spouse, paperwork for each source of income, and your most recent tax return. With these documents in hand, watch thisstep-by-step instructional video before you start working with the Tax Withholding Estimator .
There are five steps to complete the Tax Withholding Estimator. You will enter some basic information about your registration status, income and withholdings, income adjustments, tax deductions, and tax credits. The more details you provide, the more accurate your results will be. If you’re stuck in the middle of the process, you can find the answer to your questions here .
If you find that there is something wrong with your current withholdings, you can use the results of the Tax Withholding Estimator to fill out a new W-4 form – for example, your employee’s Tax Withholding Certificate – and send it back to your employer as soon as possible, as only there will be a change. may not have immediate effect. After that, keep an eye on your next few salaries to make sure the change was applied correctly.
This story was originally published on August 4, 2020, and was updated on March 16, 2021 with additional context and information.