IR-2019-155, September 13, 2019<\/p>\n
WASHINGTON \u2014 The new Tax Withholding Estimator<\/a>, launched last month on IRS.gov, includes user-friendly features designed to help retirees quickly and easily figure the right amount of tax to be taken out of their pension payments.<\/p>\n The mobile-friendly Tax Withholding Estimator replaces the Withholding Calculator. The\u00a0tool has features specially tailored to the unique needs of retirees receiving pension payments and Social Security benefits.<\/p>\n The new tool offers retirees, as well as employees and self-employed individuals, a more user-friendly way to check their withholding. Whether they receive wages or pension payments, it helps taxpayers estimate if the right amount is being withheld from their income to cover their tax liability. The\u00a0tool uses a simple, six-step question-and-answer format using information like marital or filing status, income, withholding, adjustments, deductions and credits.<\/p>\n To help people use the tool most effectively, the IRS is holding a free two-hour webinar on Thursday, September 19 at 2 p.m. Eastern time. Among other things, the webinar will feature step-by-step instructions on how to use the new Tax Withholding\u00a0Estimator and a live question-and-answer session. To sign up, visit the webinar<\/a> page on IRS.gov.<\/p>\n A retiree can use the Tax Withholding Estimator to enter any pension income or Social Security benefits they or their spouse receive. The tool then automatically calculates the taxable portion and incorporates it into an overall estimate of their projected tax liability and withholding for the year. If a withholding change is needed, the retiree can choose a tax due of close to zero or a refund amount. The\u00a0tool will then link to Form W-4P, Withholding Certificate for Pension or Annuity Payments<\/a>, and give the retiree a specific withholding recommendation based on the option chosen. It also gives instructions on how to fill in each line of the form.<\/p>\n The enhancements for retirees are just a few of the many new features offered by the Tax Withholding Estimator. Others include:<\/p>\n The IRS urges both pension recipients and wage-earners to do a Paycheck Checkup now and review their withholding for 2019. This is especially important for anyone who faced an unexpected tax bill or penalty when they filed earlier this year. It’s also a critical step for those who made withholding adjustments in 2018 or had a major life change, such as marriage, the birth of a child, adoption or buying a home.<\/p>\n People most at risk of having too little tax withheld include those who itemized in the past, but now take the increased standard deduction. They also include households with two wage earners, employees with non-wage sources of income and those with complex tax situations.<\/p>\nSpecial help for retirees<\/strong><\/h3>\n
Enhancements for everyone<\/h3>\n
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