IRS Tax Withholding Estimator
Something new is coming from the Internal Revenue Service (IRS) in 2020. The agency is launching a new Tax Withholding Estimator that should make it simpler for everyone to out the correct amount of tax withheld during the year.
Under the Tax Cuts & Job Act many tax payers are finding significant changes. This includes new tax rates, changes to deductions, caps on the amounts one can borrow for purposes of the home mortgage interest, and exclusions for certain job-related expenses.
The old Withholding Calculator has been replaced with the new Tax Withholding Estimator as the IRS continues to explore ways to help tax payers have a better experience. “The new estimator takes a new approach and makes it easier for taxpayers to review their withholding,” said IRS Commissioner Chuck Rettig. “This is part of an ongoing effort by the IRS to improve quality services as we continue to pursue modernization and enhancements of our taxpayer relationships.”
In the past the calculators were criticized for not being able to work well with all taxpayers, and had narrow usages. This new estimator has options for workers, as well as retirees and self-employed individuals, a more user-friendly tool to figure the amount of income tax they must have withheld from wages and pension payments.
You can try out the new Tax Withholding Estimator on the IRS website HERE and you will need to be able to estimate your 2019 income, your number of children you will claim for the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC), and other items that will affect your 2019 taxes like itemized deduction amounts. It will also be handy to have your most recent pay stubs and a copy of last year’s forms.
The estimator is much more user friendly, and the opening screen looks like this: