IRS Tool Can Help You Estimate If Your Tax Withholdings Are Enough

By Matt Durr
mlive.com
(TNS)

With just a few weeks left in 2024, the IRS is reminding taxpayers that a tool is available to help estimate if your federal tax withholdings for the year are enough or to determine if you can afford to take home more in your paycheck. And while it might be too late to make significant changes to your withholdings for 2024, you can estimate how much you may have to pay in or make changes that will get 2025 off to a better start.

“This tool is especially useful for individuals who owed taxes or received large refunds last year, or those who have experienced life changes such as marriage, going through a divorce, or the welcoming of a child,” the IRS wrote last month.

To use the IRS Tax Withholding Estimator, you will need to have a few documents available so you can enter the most accurate information possible. Those documents include your latest paystub from any jobs you have (as well as any for your spouse), income information for any side jobs, investments, or self-employment, and your latest tax return. The IRS says none of that information is saved in the system when you use the tool.

Once you enter that information the tool can help you determine what federal taxes you may owe next year or if you may have overpaid in 2024. You can also estimate how changing the amount you have withheld for each check can change how your taxes will look the next year.

Keep in mind that the tool only works for your federal withholdings and does not account for any state taxes.

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