If you are one of the many taxpayers who have been using the IRS’ Tax Withholding Calculator to keep tabs on your taxes, you will be excited to hear that the IRS has recently launched a new dynamic, user-friendly version. The Withholding Estimator tool launch marks the first major enhancement made to this tool since it was originally made available to taxpayers back in 2001. Read on to hear about Optima Tax Relief’s take on this new tool.
Recognizing the growth in the freelance and self-employment taxpayer base, the IRS designed this tool to make it easier for these types of taxpayers to manage their tax liability in real time, whenever they need it. Featuring simple to understand language, a progress tracker and dynamic navigation, and makes it easier than ever to generate a snapshot of either your tax liability, or your expected refund.
In addition to the enhanced design of the Withholding Tool, the content and functionality within the tool are now intuitive and dynamic. It can now automatically identify various tax benefits that the user may qualify for, and inputs those benefits into the estimating tool for the user. The estimator then automatically links to the appropriate withholding form.
Now is a great time to give the new Withholding Tool a try, as the IRS is recommending all taxpayers conduct a Paycheck Checkup. If you made any withholding adjustments, experienced any life events that may have changed your tax status, or have any pending tax penalties carrying over from the previous tax year, this is especially important.
Given the recent changes in tax laws, the Withholding Tool can mitigate any surprises, especially among those that may have itemized in the past but have now opted to take the standard deduction. Using the Withholding Tool now, instead of waiting for tax season, can make sure you are set up with the correct amount of tax withholdings heading into tax season.