With the many changes made to the tax code by the IRS, it has now become imperative to use a W4 withholding calculator to perform a paycheck checkup. The reason for this is to ensure that you have enough to pay for your tax bill from your paycheck when your payment is due. Online tax filing blog, File My Taxes Online offers a lot more insight on how to use the W-4 Withholding Calculator in its latest post - W-4 Withholding Calculator for 2019, 2020.
It is better to have more than enough saved up from your paycheck than be short of funds when it is time to pay your tax bills. This is the main reason taxpayers must use the W-4 Withholding Calculator to determine how much to withhold from their wages. Whether you currently have a job or you are living on a pension fund, the calculator comes in handy. It can be used to fill out the W-4 form as well as the W-4P, which are then submitted to your employers.
To make use of the calculator, you will need to provide an estimate of your income and your eligibility for the Earned Income Tax Credit and the Child Tax Credit. The results offered by the calculator will be solely based on the accuracy of the information you have provided. And so it is best to use the calculator again when any of the figures you have inputted changes. The calculator does not require any of your details such as your social security number or your name and address and does not save its results.
Although the W-4 Withholding Calculator can easily help you calculate how much of your paycheck should be withheld for tax purposes, it comes with its limitations. The calculator does not factor in long-term capital gains or any social security benefits that are taxable and is not recommended for taxpayers who have a complex tax situation.
File My Taxes Online recommends that taxpayers who alter their withholding in the middle of the financial year should review their limits as it could impact their tax situation the following year. For more information about the W-4 Withholding Calculator, please visit https://filemytaxesonline.org/w-4-withholding-calculator/