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Susan Tompor: Now, a new way to estimate next year's tax refund

Susan Tompor, Detroit Free Press on

Published in Home and Consumer News

Summer will soon be fading out of view and, like it or not, 2019 will move toward a close.

So what exactly have you done to withhold more money out of your paycheck to cover that 2019 tax bill?

If you need a motivator, the Internal Revenue Service has launched its much-anticipated new Tax Withholding Estimator. The calculator reportedly makes it "easier to enter wages and withholding for each job held by the taxpayer and their spouse, as well as separately entering pensions and other sources of income."

Stepping back to fine tune how much money you're withholding in taxes now can make a huge difference between dreading having to write a big check to pay taxes in April or actually looking forward to getting a tax refund.

The estimator, which replaces the old IRS online tax withholding calculator, should help you see how on track you are right now. If necessary, you could make adjustments and dedicate more or less money toward federal income taxes out of your paycheck, and your spouse's paycheck, too.

Many people found the old calculator to be a more than a bit cumbersome, but the new estimator is getting some good reviews. So it's clearly worth a look.

 

See www.irs.gov and click on "Tax Withholding Estimator."

Why do I need to think about taxes now?

Getting your withholding right, of course, takes on greater importance after a rather unsettling tax season earlier this year when many taxpayers ended up paying more than expected or took home far smaller tax refunds than usual.

If you're working in the gig economy and juggling more than one job, the new program can take that into account, too.

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