The W-4 form lets you select how much you want withheld from your pay, based on whether your spouse works, whether you have children and whether you itemize.
Both the new W-4 and the tax withholding calculator correspond with the Tax Cuts and Jobs Act that took effect at the beginning of this year.
IRS Tax Withholding Calculator
The calculator actually spans five pages — covering much more detail than what you might have come across the last time you filled out a paper W-4. The added complexity that appears in this online calculator really hits home how much the tax code has just changed.
The online withholding calculator includes questions regarding tax credits, deductions and deferrals. Plus it goes into whether you receive income from other sources and how much you have had withheld already.
The calculator is a noticeable improvement in user friendliness over the tax withholding tables that the IRS released in January. The app also links to the new W-4 form.
Why You Should Use the App
The agency encourages taxpayers to use this free app to make sure they don’t face an unexpected tax bill or penalty come the next filing deadline. Furthermore, the average refund tops $2,800, so consumers may want to choose to have less tax withheld upfront in order to receive more per paycheck.
Let us know what you think about the app after you use it — are you adjusting your withholding as a result of using the calculator? By the way, have you filed your tax return yet, readers? What concerns, if any, do you have regarding the new tax law?