How the New Tax Withholding Estimator Can Help You

If you are retired, an employer, or are self-employed – the IRS just released a new tool that you may be interested in.

Calculating estimated tax payments CAN be tricky if you are doing so on your own. Thankfully, the IRS released a brand new tool last month to help with this very issue – the “Tax Withholding Estimator“. How could this tool help you?

What is this tool?

This estimator was created to make a simple and user-friendly way to check your withholding. If you receive wages or pension payments, it helps you determine if the right amount is being withheld from your income to cover your tax liability.

This tool has a format that uses six-step question and answer format to determine withholding status. 

Helpful if You Are Retired 

“The estimator has features specially tailored to the unique needs of retirees receiving pension payments and Social Security benefits”, states the IRS newsletter. 

If you are retired, you can use the estimator to enter any pension income or Social Security benefits you or your spouse receives. Then the estimator tool will calculate the taxable portion and give you the overall estimate for the year. If you need to change your withholding, the estimator will give you steps on how to do so. 

Estimator Tool Pros

The estimator tool is easy to use on your cell phone, which is handy when you are on the go. It also gives you step by step instructions on how to use it and which information you need to enter. 

Of course, the Golden Girls are always here to help you with your tax questions and to determine how much you need withheld for your taxes to avoid penalties. But with the new release of the tool, we wanted to keep all you tax payers out there up to speed, especially to help your friends and family who may be retired. 

You can CLICK HERE to check out the Tax Withholding Estimator on the IRS website. 

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