IRS Unveils New Tax Withholding Tool
The IRS unveiled a new tax withholding tool several weeks ago, designed specifically to help Americans ensure that they are not significantly overpaying or underpaying on their tax obligations with the recent changes to tax law. The tool allows users to compare the amount their employer is withholding from their wages to a government estimation of how much should be withheld from users’ income. It considers a range of variables, such as income and household size. Its purpose is to give Americans an accurate idea of how much should be withheld so there are no surprises in April when taxes are due. If there are any discrepancies about what an employer is withholding and what should be withheld, employees can notify their employers to make the necessary changes.
The tool comes following sweeping changes to America’s tax laws, passed by Congress and signed into law by President Trump in December. As a result of the new law, many Americans are likely to see changes to their withholdings and tax obligations. In fact, Acting IRS Commissioner David Kautter told the Washington Post earlier this month that 90 percent of American families would likely see some kind of adjustment to their withholdings. The online tool is especially useful for those who face complicated tax situations – particularly those who itemize their tax return as opposed to taking the standard deduction.
Steven Mnuchin, the Treasury secretary, announced the launch of the new tool at a news conference in late February. “This is really about creating a tool for American taxpayers to check their withholdings,” Mnuchin told reporters.
Both the IRS and the Treasury Department are actively encouraging American taxpayers to use the tool. This will allow taxpayers to ensure that their withholdings are correct – helping to ensure they aren’t hit with a hefty bill in tax season.
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