Users Guides: TurboTax Tax Calculators and Apps

IRS W-4 Tax Withholding Calculator

Every year tax season calculations help American tax payers determine a lot of important figures needed for tax preparation purposes. One calculation tool that can be very helpful is a W-4 Tax Withholding Calculator.

What is a W-4 Withholding Calculator?

A IRS payroll, or paycheck withholding calculator is a helpful tool that will allow tax payers to measure how much to adjust the amount of federal taxes that are being withheld from their paychecks. It can also help self employed individuals determine how much they should be paying in quarterly payments.

TurboTax Video Tutorial: Withholding, Single vs Married

With a withholding calculator, tax filers are able to fine tune the amount of taxes they pay throughout the year in order to come out close to even with Uncle Sam at year end. The purpose here is to ensure you're not underpaying your taxes, which could cost you interest and penalty charges from the IRS. It will also help you insure your not paying too much into the IRS, which in turn will end up being an interest free loan to the government. This is money you could be using, or investing. Either way, it's not the best scenario for your finances.

IRS Income Tax Withholding Calculator

Now avoiding the overpayments that give Uncle Sam an interest free loan includes making adjustments to your W-4 withholding form and submitting it to your employer so that the amount of taxes withheld can be adjusted in your future payroll paychecks.

TurboTax W-4 Withholding Calculator

Another location that offers up this tool for free is the TurboTax website. As with other tax calculation tools TurboTax offers, the TurboTax Withholding Calculator is free to use for anyone, regardless of whether you use one of their paid products or not.

Try the TurboTax IRS W-4 Payroll Paycheck Tax Withholding Calculator for quick withholding adjustment estimates. See what changing the number of exemption you claim will do.

This TurboTax Withholding calculation can provide the information needed to help you predict your year-end tax refund total. The calculation will also help you make exemption adjustments that will correct any over-payment or underpayment from inaccurate paycheck withholdings you're paying so that your income tax refund is where you want it to be. Close to even!

Your W-4 Withholding should amount to the proper portion of your income based on an overall even end of year result.

While you may have several sources of income, the  total lump sum of income can be taxed in different ways between employed and self employed income.

IRS federal income tax is a pay-as-you-go income tax system. There are a couple ways taxpayers can approach these payments and stay in Uncle Sam's good graces.

Employee Paycheck Withholding

For employees, your employer generally withholds income tax from your paycheck. Taxes may also be withheld from other income — including pensions, commissions, bonuses, and gambling winnings. The amounts withheld, are paid under your name and social security number to the IRS.

Estimated Quarterly Tax Payments

For taxpayers that do not have paycheck withholding withheld, or do not pay enough through withholdings payments, you may be required to pay estimated tax to avoid penalties.

Self employed tax payers who are in business for themselves generally will have to pay their tax with quarterly tax payments. This amounts to quarterly estimated tax payments for income you receive from self employment income, dividends, interest, capital gains, rent, royalties and more. In this case, your estimated tax payments are used to pay your self-employment income tax, as well as your alternative minimum tax.