How to Estimate Tax Withholding
Maybe you like receiving a refund from the IRS each year. However, that refund means that you actually loaned the IRS money. If you would rather have your money now and come close to breaking even with the IRS at the end of tax time, follow the steps below to adjust and estimate your income tax withholding.
Go to the IRS Withholding Calculator at http://www.irs.gov/individuals/article/0,,id=96196,00.html
Provide the requested information in the blanks provided on the site by the IRS. This will include information from your pay stub, prior W-2 Form and tax return, and estimated charitable contributions, etc.
Take the number calculated by the IRS Withholding Calculator and write it on line H of a Form W-4 and return it to your employer.
Re-check your withholding a few times during the year with the IRS Withholding Calculator. If you are off track on what you need to withhold, the calculator will provide you a new number to place into your revised W-4 Form.
