The Internal Revenue Service reminds taxpayers that the earlier in the year they check their withholding, the easier it will be to get the right amount of tax withheld.
Besides wages, income tax is often withheld from other types of income, such as pensions, bonuses, commissions and gambling winnings. Ideally, taxpayers should try to match their withholding with their actual tax liability. If not enough tax is withheld, they will owe tax at the end of the year and may have to pay interest and a penalty. If too much tax is withheld, they will lose the use of that money until they get their refund.
This is the first in a series of weekly tax preparedness releases designed to help taxpayers begin planning to file their 2015 return.
When Should Taxpayers Check their Withholding?
Use the IRS Withholding Calculator on IRS.gov. This easy-to-use tool can help figure the taxpayer’s federal income tax withholding so their employer can withhold the correct amount from their pay. This is particularly helpful if they've had too much or too little withheld in the past, their situation has changed, or they started a new job.
Taxpayers may also use the worksheets and tables in Pub 505:TaxWithholding and Estimated Tax, to see if they are having the right amount of tax withheld.
How to Change the Amount being withheld
Events during the year may change a taxpayer’s marital status or the exemptions, adjustments, deductions, or credits they expect to claim on their return. When this happens, taxpayers may need to give their employer a new Form W-4, Employee's Withholding Allowance Certificate to change their withholding status or number of allowances.
Generally, taxpayers should give their employer a new Form W–4 within 10 days after either:
Find more information on this and other tax topics by visiting:www.irs.gov/Individuals.