The Internal Revenue Service provides taxpayers with many tools to handle their tax obligations and plan for the future. One of the most commonly used tools – tax calculator 2021 – can help you figure out whether or not you will owe to the IRS or get a refund. This tool is also known as the tax withholding estimator which only useful if you’re an employee working for an employer.

When using the tool, the information you provide on it is very critical and you will want to provide the tool with the information as exactly as on Form W-4 Employee’s Withholding Certificate. This is because your employer withholds federal income tax from your income through the information entered on your W-4. So if your anticipated tax information has changed, make sure to furnish your employer with a copy of Form W-4 with the correct information so that the right amount of tax would be withheld.

At the IRS tax calculator for the 2021, you will need to enter information about the following things so that the tool can properly estimate the tax owed and potential refund amount.

  1. Personal Information (Filing Status, Dependents, etc.)
  2. Income
  3. Withholding (Form W-4)
  4. Deductions
  5. Credits

Once these are entered, you will get an estimate of how much tax you will owe the IRS and compare it with the anticipated amount of total federal income tax withheld from your income. These two will inevitably determine whether you will get a refund from the IRS or have to pay the IRS a little more.

Head over to the IRS tax calculator 2021 to get a head start on your tax bill. Using this tool will give you more control over your income and withholding. If you’re withholding more tax than necessary which you should avoid as it would be loaning your money to Uncle Sam only to get it when you file your return, you can stop the excess tax withheld to gain a bigger cash flow.

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