Calculate Your Federal Tax Withholding
Have you ever wondered how do I calculate my federal tax withholding? I’ve always wanted to know how to calculate my federal tax withholding. In fact one time I allowed my federal tax withholding to be maxed out. As expected, the paycheck was incredibly low because of the 0 allowances. But my annual tax return that year was very high! Now that I’m starting a new job this week and need to submit my W-4 with my employer, I wanted to find a way to see how the number of allowances would impact my annual tax return. I found an awesome site that enables you to do just that! This site allows you to fill in a form and gives you an estimate of how accurate you are. And suggests the changes you need to make to your allowances. Now you can keep more of your hard earned income for each paycheck you receive! In addition to seeing how this would impact your annual tax return, you can include whether you make contributions to an IRA. For your reference, for 2013 the maximum amount of contributions that you can make to all your traditional or Roth IRA accounts is $5,500.
What’s my Recommendation?
I highly recommend CalcXML’s Federal Tax Withholding calculator over the IRS calculator which told me to put 16 allowances!!! If I input 16 allowances into the the above link, it foretells my tax demise! Don’t get into a shortfall, visit CalcXML’s Federal Tax Withholding calculator today! To all my fellow new college hires, go ahead and calculate your federal tax withholding today! If you have any comments or have found your own favorite resource I encourage you to comment below!
DISCLAIMER: This post is intended to document my own experience. Always seek professional tax advice if you are concerned about your W-4.