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What Should My Withholding Be? How to answer Form W-4…

IRS Withholding Calculator

If you are an employee, the Withholding Calculator can help you determine whether you need to give your employer a new  Form W-4, Employee’s Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form.

Who Can Benefit From The Withholding Calculator?

  • Employees who would like to change their withholding to reduce their tax refund or their balance due;
  • Employees who may need to increase their withholding due to the Making Work Pay provision in the American Recovery and Reinvestment Act of 2009, that caused changes to the federal income tax withholding tables and may result in too little tax being withheld;
  • Employees whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit);
  • Employees with non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures.

CAUTION: If you will be subject to alternative minimum tax, self-employment tax, or other taxes; or if any of your current jobs will end before the end of the year, you will probably achieve more accurate withholding by following the instructions in Publication 919, How Do I Adjust My Tax Withholding?

Tips For Using This Program

  • Have your most recent pay stubs handy.
  • Have your most recent income tax return handy.
  • Estimate values if necessary, remembering that the results can only be as accurate as the input you provide.

To Change Your Withholding:

  1. Use your results from this calculator to help you complete a new Form W-4, Employee’s Withholding Allowance Certificate.
  2. Submit the completed Form to your employer.

Continue to the Withholding Calculator

Source: http://www.irs.gov/individuals/article/0,,id=96196,00.html

By |2010-06-29T00:10:06+00:00June 29th, 2010|Employees, Tax Payments|0 Comments

About the Author:

Lauryn Charles owns and manages Accountable Financial Services Group, Inc., founded in July of 2007. Lauryn has many years of experience working with small business owners in the field of accounting, banking, and financial services. An accounting graduate with an MBA in International Business from Florida Atlantic University, Ms. Charles is an expert tax preparer and accountant. She is a Registered Tax Return Preparer as designated by the Internal Revenue Service. Ms. Charles is a member of the Pompano Beach and Deerfield Beach Chamber of Commerce. She is on the board of directors of multiple non-profit organizations, she is the co-founder of Pompano’s Young Professionals, and serves many other charitable organizations in the area.

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