IRS launches revamped tax withholding tool

IRS launches revamped tax withholding tool
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The IRS on Tuesday launched a revamped online tool that allows people to figure out how much in taxes they should have withheld from their paychecks this year.

“The new estimator takes a new approach and makes it easier for taxpayers to review their withholding,” said IRS Commissioner Charles Rettig in a news release. “This is part of an ongoing effort by the IRS to improve quality services as we continue to pursue modernization and enhancements of our taxpayer relationships.”

The release of the redesigned online tool comes after people filed their taxes this year for the first time under President TrumpDonald John TrumpBusiness school deans call for lifting country-specific visa caps Bolton told ex-Trump aide to call White House lawyers about Ukraine pressure campaign: report Federal prosecutors in New York examining Giuliani business dealings with Ukraine: report MORE's 2017 tax-cut law, as well as withholding guidance that reflected the measure.

While the average refund size through May 10 was only slightly smaller than the average refund through May 11, 2018, people's refund amounts varied greatly based on their personal tax situation. Some saw bigger refunds this year than they did last year, while other people went from receiving a refund last year to having a balance due to the IRS this year.

Taxpayers get refunds if they have too much in taxes withheld throughout the year and owe the IRS money when they file their taxes if they didn't have enough withheld. Most people received a tax cut for 2018 under Trump's law even if they had a smaller refund.

The IRS said it's particularly important for people who unexpectedly owed the agency money this year to use the new tool and review their tax withholding. Those who are most at risk of having too little in taxes withheld include people who itemized their deductions under the old tax code but are now taking the standard deduction under Trump's law, as well as households with two wage earners and employees who receive non-wage income, the agency said.

The IRS said that its new withholding tool replaces its old calculator and is designed to be more user-friendly. The agency said that the new tool gives people the ability to more effectively target receiving either a near-zero balance due or a refund when they file their taxes next year.