The Tax Withholding Estimator offers taxpayers a more user-friendly, step-by-step tool for tailoring the amount of income tax they have withheld from wages and pension payments. More people with certain tax situations can use this tool than before, such as retirees and self-employed individuals.
The IRS urges taxpayers to check their withholding each year and adjust it, if needed, to avoid tax filing surprises. It’s especially important to use the estimator now:
If a taxpayer faced an unexpected tax bill or a penalty when they filed this year.
If a taxpayer made withholding adjustments in the previous tax year.
If a taxpayer has or will experience a change in marital status, dependents, income or jobs this year.
Because taxpayers can make estimated tax payments to the IRS instead of adjusting their withholding.