Since the passage of the Tax Cut and Jobs Act (December 2017), it has become more difficult to discern how to prepare payroll withholding to ensure there is no balance due when failing taxes. (You do know it’s not a great idea to over withhold, since the IRS does not provide interest on your money that they will return later. Sure you get it in one big pile, but you can probable do better investing the extra funds during the year.)
But, this year, the IRS has developed a reasonable tax withholding estimator. This should let you figure out what your withholding should be and not leave you in lurch owing money when you file taxes in 2024.
Once you’ve used the calculator, you should file a new W-4 (and a State version of the same form) so what you computed is what will be withdrawn. (If you really want a big refund, you can up the amount to be withheld- but read my caveat above.)
To use this calculator, you will need your pay stubs (as well aś your spouse’s if you are filing jointly), last year’s [2022] W-2, 1099 forms (banks, brokers, unemployment, dividends, interest, and pensions), 1099-K, -Misc, and -NEC for your gig efforts. Oh, and don’t forget about any crypto or virtual currency transactions you effect during the year.
(By the way, if your only income is pensions or social security, this form won’t really help.)
