IRS Tax Reform Tax Tip 2019-75, June 12, 2019
Taxpayers who haven’t done a Paycheck Checkup to check their withholding in 2019 should do one as soon as possible. The best and easiest way to do a checkup is to use the Withholding Calculator on IRS.gov. However, some taxpayers may need to use Publication 505 to check their withholding.
Here are some things taxpayers should know about these two methods for checking withholding:
Withholding Calculator
- The Withholding Calculator works for most employees by helping them determine whether they need to give their employer a new Form W-4.
- Taxpayers can use their results from the calculator to help fill out the form and adjust their income tax withholding.
- If a taxpayer receives pension income, they can use the results from the calculator to complete a Form W-4P, Withholding Certificate for Pension and Annuity Payments, and give it to their payer.
- Taxpayers who don’t pay taxes through withholding, or don’t pay enough tax that way, may still use the Withholding Calculator to determine if they have to pay estimated tax quarterly during the year to the IRS. Those who are self-employed generally pay tax this way.
Instructions in Publication 505, Tax Withholding and Estimated Tax
- Taxpayers with more complex situations may need to use the instructions in Publication 505, Tax Withholding and Estimated Tax instead of the Withholding Calculator.
- This includes employees who owe self-employment tax, the alternative minimum tax, or tax on unearned income by dependents.
- Publication 505 can also help those who receive non-wage income such as dividends, capital gains, rents and royalties.
- The publication includes worksheets and examples to guide taxpayers through these special situations.