 internal revenue service IRS tax news check tax withholdings now to avoid paying future quarterly estimated payments and don't take that tone with me iris i'll check my withholdings when i'm good and ready dang it dang iris always trying to tell you how to do honestly it makes you feel like that poor american russian hockey player they've tried to make play while wearing like a rainbow jumpsuit and a leather thong holding on to a strap on hockey stick attached to his waist so the only way he could swap the puck around was by using extreme pelvic thrusts and gyrations honestly things are getting so strange these days man i would i wouldn't be surprised if the iris went back to requiring paper checks at this point just so they could force you to make your payment using specific rainbow color checks the signature line reading thank you big daddy government may i have another and if you and if you'd if your payment isn't made using the specific rainbow color checks with the signature line saying thank you big daddy government may i have another off with your head the little head that is so it can be used to make transgender fallacies let the punishment fit the crime the mainstream media squeals with glee okay i i exaggerated a little bit but but just a little i are 2023-10 january 19 2023 washington the internal revenue service reminds taxpayers who earn wages to use the tax withholding estimator now to adjust their 2023 withholdings there's a link to the tax withholding estimator here let's just give a quick recap of how the tax system works and why you might want to look at your withholdings at this point in time for 2023 tax year so we have what's called a pay as you go type of system meaning the iris wants the money throughout the year as you earn the money not when the tax return is is due so for example for tax year 2022 which is the focus of most people at this point in time then the tax return is due by april 15th or april 18th or whatever in the following year in this case 2023 but the payments need to be happening during 2022 the iris will frame that as though they're kind of helping you out we just want to help you out by making payments during the year so that we actually are the good guys and we give you a refund when you file the tax return at the at april 15th or 18th or whatever but obviously the real case is that the iris wants to get their money early and they would actually like to take you out of the equation altogether and get the money from directly your employer so you don't get your greedy little hands on it you might not give it to them so that's how the system is kind of going to be set up why do they have leverage over the employer because it's an income tax type of system and the person that's paying the taxes wants the deduction the deductions are good therefore they have the leverage over the payer not the person that's earning the income to kind of at least tell the iris who earned the income if not make the withholdings on themselves now the problem with this kind of system it's kind of is that you're making estimates basically which would be doable if we had like an easy tax code like a flat tax system or and or if our tax our wage situation was somewhat static over time and or if we if we had a tax code that wasn't changing dramatically but but none of those things are the case at one time those things might have been more the case the tax code was you know a little bit simpler at some one point most of the income that people earned oftentimes were one income households who with an employer with a with a worker that worked at the same place for a long time so their income was some somewhat static and the tax code although changes over time doesn't change dramatically over time obviously in recent years all those things are changing people's people are earning household earnings aren't just one earner so now you have the complexity that is a lot more complex when you got multiple earners in the family to think about what your estimated taxes will be and the tax code of course has been changing a lot because the tax code is what has been used in part for the response to this COVID thing and of course the tax code has been getting more and more complex so that makes the whole withholding thing much more difficult because you don't really know what your income is going to be really until you actually file the tax return and if you try to make withholdings based on what you earned during the year you can't really do that because it's a progressive tax system so you don't know which tax rates to apply to that income and you can't really rely on prior years because of the changes to the code and the changes to people's personal income and so on throughout the kind of strange last couple years therefore you got to rely a lot more on doing estimates to avoid the penalties and interest so in 2022 it's likely that people had to do so we're focused on 2022 now because that's when we're filing the tax return it's likely to get things correct people had to adjust their withholdings throughout the year and it's likely that many people don't have things correct which means they're going to end up with large refunds over what they you know may have wanted because they could have got that money sooner in the year or they end up owing money so that means that in the current year for 2023 you need to make the adjustments now usually we make the adjustments based on the prior year we look at 2022 and then we try to project what's going to happen in 2023 and and adjust your w4s in accordance with that or your estimated tax payments but again because things are changing so much you might have to make another estimate basically for 2023 so in other words if you had to make any changes for 2022 if your 2022 tax return has a very large refund or you owe money or even if it's not the case you probably still want to do an estimate for 2023 you'd like to do it early in the year so that you can have the withholdings taken out you know evenly throughout the entire year and instead of having to try to figure out at the end of the year if you're under or over and even doing that these days you might have to check this withholding estimate or a couple times in a year maybe two or three times to try to make sure that you're not under paying or whatever so that's the general idea okay people's tax situation occasionally changed through marriage or divorce adding a child or having one move out on their own checking now and making necessary adjustments early in the year may help them avoid the need for quarterly estimated tax payments so the tax withholding estimator online tool helps taxpayers see if they may get a refund or need to make a payment directly to the irs to avoid a tax bill and penalties next year uh income taxes are pay as you go there's a link to that here and are normally paid during the year as income is received through withholdings from paychecks pensions payments social security benefits and certain other government payments having a second job or non-wage income from employment self-employment annuity income the gig economy or digital assets may require taxpayers to make quarterly estimated tax payments to avoid a balance due when they file in addition various financial transactions especially late in the year can have an unexpected tax impact and examples include year end and holiday bonuses stock dividends capital gain distributions from mutual funds and stocks bonds virtual currency real real estate or other properties sold at a profit the withholding estimator the tax withholding estimator also available in spanish in espanol may be to the end can help wage earners determine if they have too much or too little tax withheld so it actually is a good tool it's kind of it's basically like it's getting more and more like a software like tax software kind of trying to project into the future which is kind of what you need these days because of all the complications we talked about taxpayers may use the estimate to change their withholding amount and submit a new w for employees withholding certificate there's a link to that here to their employer the tool offers those who earn wages step by step help for tailoring their amount of income tax they should have withheld from their paycheck make a tax payment the fastest and easiest way to make an estimated tax payment is to do so electronically using direct pay there's a link to that here it's iris direct pay or the treasury department's electronic federal tax payment system that's the eftps system there's a link to that for information on other payment options you can visit pay online there's a link to that here if paying by check be sure to make the check payable to the quote united states treasury end quote other items may affect 2023 taxes some unforeseen life events can trigger a need to make withholding adjustments here are some tools to help taxpayers know how to make adjustments due to different scenarios so you've got the tips for using the irs tax withholding estimator links to all this stuff there's what to do with your tax withholding estimator results cry and then and then you do something you take a moment to reflect on what happened in your life and how you've gotten to this point and then and then you pay the dang bill so about form w for employees withholding certificate there's a link to that here including recent updates related forms and instructions on how to file you've got the coronavirus tax relief help for taxpayers businesses tax exempt organization and others including health plans affected by the coronavirus that's COVID-19 disaster assistance emergency relief for individuals and businesses special tax law provisions when the federal government declares their location a major disaster area you've got irs publication 4128 tax impact of job loss explains how this unfortunate circumstance can create new tax issues so you lost your job let's talk about the tax issues related to it your anyways workers moving into the gig economy there's a link to that here due to the pandemic advises people earning income in the gig economy they advise you to get ready and watch yourself watch yourself you better buy yourself a full length mirror because the iris is coming after you and you better watch yourself start sleeping in one of those fun houses with the mirrors all around so you can watch yourself with the gig economy work because they're they be watching you they'll be watching you tell you that or they're trying any gig publication 505 taxpayer withholding an estimated tax there's a link to that here has additional details including worksheets and examples that can be helpful to those who have special situations for more information you got the fact sheet two thousand twenty three oh one how to get tax withholding right so we got a whole lot of links to reading material that you can do like whenever you feel like just taking a break and reading some good casual reading there'll be a link to this in the description