Did you have too little or too much federal tax withheld from your pay in 2007 - owing money or getting a large refund when you filed your tax return? You may want to adjust your federal tax withholding with your employer. The withholding calculator, on the IRS Web site at IRS.gov can help you figure the correct amount of federal withholding and provide information you can use to complete a new Form W-4, Employee's Withholding Allowance Certificate.
"Life brings constant changes to individual financial situations," said Clay Sanford, an IRS spokesman in Dallas. "Things like marriage, divorce, a new child or home purchase can all be reasons to adjust your withholding. If you are having too much withheld, now is the time to put a little more into your own pocket."
Before you begin, you need to have a few items handy: Your most recent pay stubs and your most recent federal income tax return.
Here are some tips for using the withholding calculator:
- Fill in all information that applies to your situation.
- Estimate when necessary. Remember, the results are only as accurate as the information you input.
- Check out the information links embedded in the program whenever you have a question.
- Print out the final screen that summarizes your input and the results. Use it to complete a new Form W-4 (if necessary) and give the completed W-4 to your employer. Keep the print of the final screen and a copy of your new W-4 with your tax records.
For many people, the withholding calculator is a great tool that can simplify the process of determining your withholding. Also, see Publication 919, How Do I Adjust My Tax Withholding, which is available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
Click here to use the IRS Withholding Calculator.
Source: IRS
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