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The Internal Revenue Service (IRS) reminds taxpayers that proper tax withholding now is key to avoiding surprises when they file their tax return next year.  Making any needed adjustments earlier in the year means taxpayers will not have to make a big change later in the year to catch up.

The is a free online tool that helps employees determine if they are having the right amount of federal income tax withheld from their paychecks.  Using it can prevent taxpayers from having an unexpectedly large tax bill or a substantial refund when they file taxes each year.

Why use the estimator?
Taxes are pay-as-you-go, which means that taxpayers need to pay their tax as they receive their income.  They do this through withholding.  For employees, "withholding refers to the federal income tax portion of each paycheck that an employer takes out for tax purposes.  

After using the , taxpayers can determine if they need to submit an updated , to their employer or adjust the amount they voluntarily set aside for tax purposes.  By adjusting , individuals can:

• Prevent owing money and potential penalties at tax time.
• Adjust withholdings to increase take-home pay instead of waiting for a refund.

Use the tool once per year.

For an effective tax withholding estimate, the IRS recommends taxpayers gather certain documents, including:

• All income statements, including those of your spouse if filing jointly.
• Data from other sources of earnings.
• Your most recent tax return.

More information:

For more information on the , review the at IRS.gov.