Taxpayers who need to pay more before tax time have a few different options on how they can do so. First, all employees should make sure their employers are withholding the correct amount of tax from their paychecks.
The best way for employees to check their withholding is to use the Withholding Calculator on IRS.gov. They can use the calculator to do a Paycheck Checkup. This lets the employee check to see if their employer is taking enough tax from their paycheck to cover the amount of tax they owe. After using the calculator, if necessary the employee can change the amount of tax their employer takes out of their paycheck. This will help employees avoid an unexpected result at tax time, such as a smaller refund.
Here are three ways that taxpayers can adjust their withholding:
Changing the withholding allowances on Form W-4. When an employee reduces the number of allowances on their Form W-4, they increase the amount of income tax their employer withholds from their pay. On one hand, this mean a smaller paycheck. On the other hand, the employee is paying more tax upfront. This usually will mean less chance that they employee will see a smaller refund or larger tax bill at tax time.
Having an extra flat-dollar amount withheld from each paycheck. Employees whose employers are already withholding the least amount of allowances can simply add a specific amount to their withholding. These employees can indicate this amount on a new Form W-4 and submit this to their employer or their employer’s payroll department. For example, an employee can tell their employer to withhold an extra $200 per paycheck. This will allow withholding to occur more evenly throughout the year.
Making estimated tax payments throughout the year. Estimated payments are another way for taxpayers to pay what they owe in separate payments made throughout the year. For tax year 2019, remaining estimated tax payments are due from individual taxpayers on June 17 and Sept. 16, 2019, with the final being due Jan. 15, 2020. The fastest and easiest way to make estimated tax payments is electronically using Direct Pay or Electronic Federal Tax Payment System. Taxpayers can visit IRS.gov for other payment options.
Comments