The Internal Revenue Service has a new withholding estimator to help individuals figure out whether they’re having the right amount of income tax withheld form their paychecks or retirement distributions. Employees, self-employed, retirees and others can utilize this handy web tool. It asks about other sources of income in addition to wages, and it also provide tips on tax credits and various deductions. It is especially useful for people who had to little withheld from paychecks last year and owed IRS when they filed their returns or got a smaller refund than expected. It estimates how much additional withholding, if any taxpayers should request. Submit a new W-4 to your employer if you want to change your withholding.
The Kiplinger Tax Letter