Are you ready for Tax Day?

Well its almost the end of the 3rd quarter of the year and this is a great time to assess your tax burden for the year 2009. If you are typical wage earner and have your taxes taken out of your paycheck, you can easily determine if you're going to have enough to have your taxes paid and maybe get a refund this year. We typically like to have less than a $1000 tax refund so more money goes into our pockets during the year, but I absolutely hate to pay additional taxes on April 15th.
 
The IRS has a nifty calculator that lets you calculate your tax burden and it takes into consideration several legislative events that occurred this year.
 
The American Recovery and Reinvestment Act of 2009, introduced several changes that affect this Withholding Calculator:
(1) The new Making Work Pay Credit:   The new withholding tables that employers should have implemented by April 1 have been incorporated into the calculator.
You should use this calculator to ensure that the reduced withholding will not result in having too little income tax withheld (possibly causing you to owe taxes next year) if:
  • You are an employee with two concurrent jobs,
  • You and your spouse both work, or
  • You can be claimed as a dependent on someone else's tax return (since you are not eligible for this credit).
(2) Pension income: Non-government pension income is not eligible for the Making Work Pay Credit, and the calculator now accounts for this. If you expect to receive a significant amount of pension income in 2009, you should use this calculator so that you can adjust your withholding appropriately for the second half of the year.
(3) Unemployment Compensation:  The first $2,400 of unemployment compensation an individual receives in 2009 is now tax free. The Withholding Calculator now accounts for this, so enter the full amount into the calculator.
Purpose of This Computer Program The purpose of this application is to help employees to ensure that they do not have too much or too little income tax withheld from their pay. It is not a replacement for Form W-4, but most people will find it more accurate and easier to use than the worksheets that accompany Form W-4. You may use the results of this program to help you complete a new Form W-4, which you will submit to your employer.
Tips For Using This Program
  • Have your most recent pay stubs handy.
  • Have your most recent income tax return handy.
  • Fill in all information that applies to your situation.
  • Estimate values if necessary, remembering that the results can only be as accurate as the input you provide.
  • Consult the information links embedded in the program whenever you have a question.
  • Print out the final screen that summarizes your input and the results, then use it to complete a new Form W-4 (if necessary), and keep it for your records.
Who Can Benefit From This Application?
  • Employees who would like to change their withholding to reduce their tax refund or their balance due;
  • Employees whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit);
  • Employees with non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures.
For Special Situations If your situation is among those listed below, you will probably achieve more accurate withholding by following the instructions in Publication 919, How Do I Adjust My Tax Withholding?

  • If you will be subject to alternative minimum tax, self-employment tax, or other taxes; or
  • If any of your current jobs will end before the end of the year.
NOTE: The information you provide is anonymous and will be used only for purposes of this calculation. It will not be shared, stored or used in any other way, nor can it be used to identify the individual who enters it. It will be discarded when you exit this program.
2009 IRS Tax Withholding Calculator
 

No comments:

Post a Comment