The IRS encourages everyone to use the IRS Withholding Estimator to perform a quick “paycheck checkup.” The Estimator helps you identify your tax withholding to make sure you have the right amount of tax withheld from your paycheck at work. There are several reasons to check your withholding:
- Checking your withholding can help protect against having too little tax withheld and facing and unexpected tax bill or penalty at tax time next year.
- At the same time, you may prefer to have less tax withheld up front, so you receive more in your paychecks and get a smaller refund at tax time.
If you are an employee, the Withholding Estimator helps you determine whether you need to give your employer a new Form W-4. Shortcut: this update can also be made in POSC (log into your account and choose Update Address / W4 (Tax Withholding). You can use your results from the Estimator to help fill out the form and adjust your income tax withholding.
Plan Ahead: Tips For Using This Program
The Estimator will ask you to provide filing status, estimate values of your 2025 income from a variety of sources, adjustments, deductions to reduce the amount of your income subject to income tax, tax credits to subtract from your tax obligation, and other items that will affect your 2025 taxes. This process will take a few minutes.
- Gather the most recent pay statements for yourself, and if you are married, for your spouse too.
- Gather information for other sources of income you may have.
- Have your most recent income tax return handy.
- Use whole dollar amount in the estimator.
- Keep in mind that the Tax Withholding Estimator’s results will only be as accurate as the information you enter.
- The Withholding Estimator does not ask you to provide sensitive personally – identifiable information like your name, Social Security number, address, or bank
account numbers. The IRS does not save or record the information you enter on the Estimator.
IMPORTANT NOTE: The Withholding Estimator works for most taxpayers. People with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes taxpayers who owe alternative minimum tax or certain other taxes, and people with long-term capital gains or qualified dividends.