IRS provides details on tax withholding estimator tool
The Internal Revenue Service said that a new tax withholding estimator tool includes a feature designed to make it easier for employees who also receive self-employment income to accurately estimate the right amount of tax to have taken out of their pay.
The estimator is an expanded, mobile-friendly online tool that replaced the withholding calculator, which since 2001 had offered workers an online method for checking their withholding, the IRS said in an announcement this month.
The new tool offers self-employed individuals, workers, retirees and other taxpayers a more dynamic and user-friendly way to calculate the amount of income tax they want to have withheld from either wages or pension payments, the IRS said.
Among other things, the estimator allows a user to enter any self-employment income in addition to wages or pensions.
The user is then alerted that they may qualify for several special tax benefits. See more on irs.gov
, including the self-employment health insurance deduction or the deduction for contributions to a Simplified Employee Pension (SEP), Savings Incentive Match Plans for Employees (SIMPLE) or other qualified retirement plan, the IRS said.
The new estimator also makes it easier to enter wages and withholding for each job held as well as jobs held by a spouse, the IRS said.
More details are available at irs.gov
