Paycheck Calculator and W-4 Creator
When filling out a new W-4 for your job, you might have asked yourself: why is this W-4 so complicated? What do I enter where? How will this affect my paycheck and next tax return?
The generic design of the Form W-4 does not give you the actual tax withholding amount. This Taxpert paycheck calculator is an integrated calculator that also creates a W-4 Form based on your pay period paycheck. Thus, you can easily manage your IRS tax withholding based on your paycheck and make adjustment as needed.
At the end of the paycheck calculator, the tool will layout steps on how to increase or decrease your per period federal tax withholding. You might ask yourself: how do you know if you should increase or decrease your per paycheck tax withholding?
We suggest you lean on your latest tax return to make educated withholding changes. For example, if you received a tax refund , e.g. $1,400, take that refund amount and divide it by the number of months remaining this year (if we are in May, you would have 7 months left (June - December): $1,400 divided by 7 = $200. Let's call this the refund based adjust amount . Then, look at your last paycheck's tax withholding amount, e.g. $250, and subtract the refund adjust amount from that: $250 minus $200 = $50. That result is the tax withholding amount you should aim for when you use this tool, in this example, $50 .
Paycheck based W-4 Estimator, Creator
Use the Paycheck Calculator or PAYuycator below and, at the end of the calculation in section P16.3, you will see your per paycheck tax withholding amount based on your selected pay period. You will find instructions on how to increase or decrease that tax withholding amount . When done, create the W-4 and the result of that W-4 will be based on your paycheck calculation results. Complicated? Yes, it might seem so, but since the W-4 is created this way, that is all we have to work with. Contact a Taxpert® if you have questions .
Once you are done, take it a step further and estimate your annual Taxes based on the W-4 tax withholding you have just calculated: Use the current year Tax Calculator.
More Form W-4 tools to further optimize your tax withholding based on your individual estimated or actual income.
Prepare to tax prepare - learn how to begin planning for your tax return by keeping track of your finances and their tax implications during the year.
Contact a Taxpert® to discuss your individual W-4 planning challenges.
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