🛑 Taxpayers can take a hit to their wallets if they don’t use the IRS tax withholding calculator, according to a warning issued by the Federal Agency. Americans often get hit with “surprise fees” when their previous year’s tax refund was too large or they had the wrong amount withheld from their income.
🔎 But with the IRS TAX Withholding Estimator from the IRS, you can ensure you’re withholding the correct amount from their pay in 2024. The tool allows employees and retirees, as well as the self-employed, to adjust the amount of tax withheld from their wages to avoid surprises next year.
Traditionally, withholding refers to the amount of federal income tax deducted from payroll. If employees find that the estimator says the amount is off, they can fill out a new W-4 form and ensure the correct amount is withheld so they don’t get a surprise tax bill or penalty when they file their return.
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“The Tax Withholding Estimator will help taxpayers avoid unwanted results in 2024 if their 2023 return refund was too large, too small, or if they received a surprise tax bill amount due,” the IRS states on its website.
📌 To use the tool, you’ll need:
- Your most recent tax returns, as well as those of your spouse, if you’re married;
- Information about other sources of income;
- Your most recent tax return.
🛑 Not withholding the proper amount of income could become an increasingly common problem, as the IRS has increased many tax brackets and deductions by more than 5%.
✅ One way to stay on top of your taxes is to have the best advice, and at Wave Tax we are here to advise you, do your tax planning and maximize efficiency for our clients and businesses.
📩 Contact us at info@wavetax.us