To avoid any surprises, the use of the IRS Tax Withholding Estimator should be emphasized at this time of the year.
IRS Tax Withholdings Estimator’s importance should be remembered at this time of the year. (Photo: Keiter CPA)
The Use Of IRS Tax Withholding Estimator
The Internal Revenue Service (IRS) is urging taxpayers to use the IRS Tax Withholding Estimator and to review their tax withholdings before the end of the year. The use of the IRS Tax Withholding Estimator is to avoid any surprises when they file their returns next year.
Many taxpayers withhold too much throughout the year, resulting in a one-time refund but lower take-home pay so the use of the IRS Tax Withholding Estimator would be very helpful. Adjusting withholdings and making use of the IRS Tax Withholding Estimator can help boost take-home pay instead of receiving a refund.
Aside from knowing the IRS Tax Withholding Estimator, various life events such as marriage, childbirth, job loss, and natural disasters can also impact withholdings. The IRS recommends using the IRS Tax Withholding Estimator to determine if taxpayers are withholding too much and how to adjust the amounts.
According to a published article by AL.com, this IRS Tax Withholding Estimator can also help determine if taxpayers should withhold more or make estimated tax payments. The use of the IRS Tax Withholding Estimator is also to avoid unexpected bills when filing.
2023 Tax Year
In a published article by Forbes, for the 2023 tax year, the upper limits of the brackets are 7% higher than the previous year, potentially making it less likely for individuals to fall into higher tax rates. Tax brackets are used to calculate the amount of taxes owed each year.
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