2018 Updated IRS Withholding Calculator Released

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iceport
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2018 Updated IRS Withholding Calculator Released

Post by iceport » Thu Mar 01, 2018 8:19 am

Updated Withholding Calculator, Form W-4 Released

IRS Withholding Calculator

Form W-4 (released 2/27/2018)

IR-2018-36, Feb. 28, 2018

WASHINGTON –The Internal Revenue Service today released an updated Withholding Calculator on IRS.gov and a new version of Form W-4 to help taxpayers check their 2018 tax withholding following passage of the Tax Cuts and Jobs Act in December.

The IRS urges taxpayers to use these tools to make sure they have the right amount of tax taken out of their paychecks.

“Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they’re having the right amount of tax withheld for their personal situation,” said Acting IRS Commissioner David Kautter.

The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets.

If changes to withholding should be made, the Withholding Calculator gives employees the information they need to fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Employees will submit the completed W-4 to their employer.

“Withholding issues can be complicated, and the calculator is designed to help employees make changes based on their personal financial situation,” Kautter said. “Taking a few minutes can help taxpayers ensure they don’t have too little – or too much – withheld from their paycheck.”

The withholding changes do not affect 2017 tax returns due this April. However, having a completed 2017 tax return can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year.
"Discipline matters more than allocation.” ─William Bernstein

Random Poster
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Re: 2018 Updated IRS Withholding Calculator Released

Post by Random Poster » Thu Mar 01, 2018 9:38 am

Thank you for posting.

Tamales
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Re: 2018 Updated IRS Withholding Calculator Released

Post by Tamales » Thu Mar 01, 2018 10:15 am

From the new W4: " Use this worksheet only if you plan to itemize deductions, claim certain adjustments to income, or have a large amount of nonwage income."

What constitutes a "large amount of nonwage income?" I suppose any amount (e.g. of interest from a CD) that will result in an income tax obligation of more than a few hundred bucks might need to be considered (to avoid underpayment penalty), which doesn't require what I would call a 'large amount of nonwage income' to trigger it.

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verbose
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Re: 2018 Updated IRS Withholding Calculator Released

Post by verbose » Thu Mar 01, 2018 10:25 am

Tamales wrote:
Thu Mar 01, 2018 10:15 am
From the new W4: " Use this worksheet only if you plan to itemize deductions, claim certain adjustments to income, or have a large amount of nonwage income."

What constitutes a "large amount of nonwage income?" I suppose any amount (e.g. of interest from a CD) that will result in an income tax obligation of more than a few hundred bucks might need to be considered (to avoid underpayment penalty), which doesn't require what I would call a 'large amount of nonwage income' to trigger it.
The new W-4 is still based on the 2018 exemption amount, $4150, that was announced before tax law changes. Each withholding exemption represents $4150 of taxable income. Given that, I would guess the large amount is anything greater than $4150. Each $4150 of nonwage income "balances out" one withholding exemption. I don't know why the instructions use "large amount" instead of specifying the amount.

prd1982
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Re: 2018 Updated IRS Withholding Calculator Released

Post by prd1982 » Thu Mar 01, 2018 10:27 am

Unfortunately, the IRS calculator does not handle long term capital gains or qualified dividends.

H&R Block's windows program has a next year planner which does ask about these items. But their planner hasn't been updated for 2018 yet (hopefully March). Not sure if Turbo Tax has a similar feature. Once updated it will be interesting to compare the IRS vs H&R Block tools

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verbose
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Re: 2018 Updated IRS Withholding Calculator Released

Post by verbose » Thu Mar 01, 2018 11:59 am

You can adjust long term capital gain income for the W4 if you have a good idea of your marginal tax rate and LTCG rate.

The formula is
LTCG for W4 = LTCG * LTCG Rate / Marginal Rate

If your LTCG rate is 15% and marginal rate is 22%, it takes $6086 of LTCG to equal one withholding exemption.

onourway
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Re: 2018 Updated IRS Withholding Calculator Released

Post by onourway » Thu Mar 01, 2018 1:15 pm

Why does the calculator not determine tax liability on bonuses even though it asks what you expect those to be, and they are taxed at a flat rate?

nolesrule
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Re: 2018 Updated IRS Withholding Calculator Released

Post by nolesrule » Thu Mar 01, 2018 1:26 pm

onourway wrote:
Thu Mar 01, 2018 1:15 pm
Why does the calculator not determine tax liability on bonuses even though it asks what you expect those to be, and they are taxed at a flat rate?
They aren't taxed at a flat rate. They may or may not have withholding at a flat rate, depending on how the bonus is paid.

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nisiprius
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Re: 2018 Updated IRS Withholding Calculator Released

Post by nisiprius » Thu Mar 01, 2018 1:29 pm

The Washington Post's detailed article notes:
The Washington Post wrote:Getting an estimate requires answering well over a dozen questions, and taxpayers need a lot of information at their fingertips, like the amount they have withheld throughout the year so far, as well as adjustments to their income based on IRA contributions or student loan interest payments.
Do people need it?
Mnuchin told reporters “I don't think the majority of Americans need to do anything." .... Acting IRS Commissioner David Kautter said about 90 percent of taxpayers would have “some adjustment one way or the other”
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

spectec
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Re: 2018 Updated IRS Withholding Calculator Released

Post by spectec » Thu Mar 01, 2018 1:32 pm

After looking at the new W-4, I think the best approach is to hang it on a dartboard and choose the best out of 3 tosses.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

onourway
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Re: 2018 Updated IRS Withholding Calculator Released

Post by onourway » Thu Mar 01, 2018 1:35 pm

nolesrule wrote:
Thu Mar 01, 2018 1:26 pm
onourway wrote:
Thu Mar 01, 2018 1:15 pm
Why does the calculator not determine tax liability on bonuses even though it asks what you expect those to be, and they are taxed at a flat rate?
They aren't taxed at a flat rate. They may or may not have withholding at a flat rate, depending on how the bonus is paid.
Yes, sorry I meant withholding, not taxed. In any case, it could be made clearer. A simple check box could offer the option of calculating based on the optional flat withholding rate which many employers use.

lateregistration
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Re: 2018 Updated IRS Withholding Calculator Released

Post by lateregistration » Thu Mar 01, 2018 1:35 pm

I had a question regarding how to handle bonuses, as well. I tried to plug my numbers into the calculator and came up with this:

Based on the information you previously entered, your anticipated income tax for 2018 is $4,265. If you do not change your current withholding arrangement, you will have $4,029 withheld for 2018 leaving $236 due when you file your return. You should adjust your withholding on a new Form W-4 as follows: • For the only job you entered (which has a projected salary of $55,000): 4 allowances.
•Check the “Single” box on your Form W-4

Filing Status: single
Someone else can claim you as a dependent: no
Number of jobs: 1
Number of dependents: 0
Will you be 65 or older 1/1/2019: no
Are you blind: no
Child & dependent care credit qualifying persons: 0 Child & dependent care credit expenses: $0
Child credit qualifying children: 0 EITC qualifying children: 0
Other credits: $0
Total salary: $55,000
Total plans and cafeteria: $3,100
Total tax withheld to date: $1,446
Total tax withheld from last check: $123
Total earned income other than salary: $0 Nonwage income: $0
Adjustments to income: $2,800
Total itemized deductions: $0
Projected additional withholding if you do nothing: $2,583

I get paid bi-weekly. I've been claiming "4" since the start of the year. My gross salary is now $53,250, but it was approximately $1200 less until my pay raise took effect this week. I've already been paid a bonus (my company pays in early February). The gross amount was $3,006. In total, my gross wages would be about $56,000. I also have insurance and other company benefits deducted on a pre-tax basis (this totals about $95 bi-weekly). I expect to contribute a minimum of $3100 to my 401K - I'm currently at 5% but looking to increase to 8% after April.

Do these numbers look accurate or should I be reflecting the bonus differently? Is $55,000 the correct figure to use or should I subtract the pre-tax benefits? I'm concerned that I should drop withholding to "3" or potentially face an underpayment.

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tcassette
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Re: 2018 Updated IRS Withholding Calculator Released

Post by tcassette » Thu Mar 01, 2018 1:40 pm

I couldn't get the calculator to work on my computer, even after disabling all blockers. It wouldn't let me populate all the income boxes. I used both Firefox and Chrome to no avail. Let me guess: it only works with Internet Explorer. No thanks.

onourway
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Re: 2018 Updated IRS Withholding Calculator Released

Post by onourway » Thu Mar 01, 2018 1:40 pm

tcassette wrote:
Thu Mar 01, 2018 1:40 pm
I couldn't get the calculator to work on my computer, even after disabling all blockers. It wouldn't let me populate all the income boxes. I used both Firefox and Chrome to no avail. Let me guess: it only works with Internet Explorer. No thanks.
I am using Firefox.

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iceport
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Re: 2018 Updated IRS Withholding Calculator Released

Post by iceport » Thu Mar 01, 2018 1:53 pm

onourway wrote:
Thu Mar 01, 2018 1:40 pm
tcassette wrote:
Thu Mar 01, 2018 1:40 pm
I couldn't get the calculator to work on my computer, even after disabling all blockers. It wouldn't let me populate all the income boxes. I used both Firefox and Chrome to no avail. Let me guess: it only works with Internet Explorer. No thanks.
I am using Firefox.
Same here, with no need to pause or disable any blockers.
"Discipline matters more than allocation.” ─William Bernstein

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iceport
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Re: 2018 Updated IRS Withholding Calculator Released

Post by iceport » Thu Mar 01, 2018 5:07 pm

nisiprius wrote:
Thu Mar 01, 2018 1:29 pm
Do people need it?
It's a good idea to spend 5 minutes running the numbers, given the number of parts they moved around. I was actually impressed with the ease of use, and the level of customization in the results.

If I want to experiment with a Roth conversion, where does that income get entered? The third line on Page 3 under "Nonwage Income"?
Enter an estimate of any other nonwage income (such as dividends or interest received) you expect to receive in 2018. Do not include amounts you included in earned income above:
"Discipline matters more than allocation.” ─William Bernstein

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Re: 2018 Updated IRS Withholding Calculator Released

Post by Random Poster » Thu Mar 01, 2018 5:22 pm

lateregistration wrote:
Thu Mar 01, 2018 1:35 pm
Do these numbers look accurate or should I be reflecting the bonus differently? Is $55,000 the correct figure to use or should I subtract the pre-tax benefits? I'm concerned that I should drop withholding to "3" or potentially face an underpayment.
I don't know if it makes any difference in the end "expected tax" number, but I put the bonus amounts under the "Total earned income other than salary" heading (along with stock grants).

Also, you put in the gross salary amount under "total salary" (along with life insurance costs that are shown on your paystub), but then you put the pre-tax expenses (health insurance, etc) under the "Total plans and cafeteria" heading. So I think that you did that part correctly.

That all said, when I ran my numbers, the anticipated tax due seems awfully low compared to the expected/anticipated income. Whether that is a feature of the new tax law or a bug in the withholding calculator remains to be seen I guess.

lateregistration
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Re: 2018 Updated IRS Withholding Calculator Released

Post by lateregistration » Thu Mar 01, 2018 6:11 pm

Random Poster wrote:
Thu Mar 01, 2018 5:22 pm
lateregistration wrote:
Thu Mar 01, 2018 1:35 pm
Do these numbers look accurate or should I be reflecting the bonus differently? Is $55,000 the correct figure to use or should I subtract the pre-tax benefits? I'm concerned that I should drop withholding to "3" or potentially face an underpayment.
I don't know if it makes any difference in the end "expected tax" number, but I put the bonus amounts under the "Total earned income other than salary" heading (along with stock grants).

Also, you put in the gross salary amount under "total salary" (along with life insurance costs that are shown on your paystub), but then you put the pre-tax expenses (health insurance, etc) under the "Total plans and cafeteria" heading. So I think that you did that part correctly.

That all said, when I ran my numbers, the anticipated tax due seems awfully low compared to the expected/anticipated income. Whether that is a feature of the new tax law or a bug in the withholding calculator remains to be seen I guess.
I played around with a few different calculations and the results are close:

Based on the information you previously entered, your anticipated income tax for 2018 is $4,037. If you do not change your withholding arrangement, your withholding for 2018 will approximately equal your tax, and any refund or balance due should be less than $25.


Following is a recap of information entered on the preceding pages on which the above advice is based.
Prepared: March 1, 2018

Filing Status: single
Someone else can claim you as a dependent: no
Number of jobs: 1
Number of dependents: 0
Will you be 65 or older 1/1/2019: no Are you blind: no
Child & dependent care credit qualifying persons: 0 Child & dependent care credit expenses: $0
Child credit qualifying children: 0 EITC qualifying children: 0
Other credits: $0
Total salary: $56,000
Total plans and cafeteria: $5,800
Total tax withheld to date: $1,446
Total tax withheld from last check: $123
Total earned income other than salary: $0
Nonwage income: $0
Adjustments to income: $2,800
Total itemized deductions: $0
Projected additional withholding if you do nothing: $2,583



Upon review, I had misapplied a few things:

Forgot to add in my pre-tax health insurance deductions (the $5800 figure reflects that plus my expected 401K contributions)

The $2800 figure under "adjustments to income" was actually meant to reflect the $2500 I will deduct for student loan interest and a projected $300 contribution to a Traditional IRA (contribution may be more - just a conservative estimate). So, although the initial figures weren't exactly right, it seems like I'm still pretty close and my W-4 withholding of 4 may work out perfectly for me. It really is a surprise - I just figured I'd have more tax liability. Like you, I hope the figures on this calculator are accurate.

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iceport
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Re: 2018 Updated IRS Withholding Calculator Released

Post by iceport » Sat Mar 03, 2018 5:51 pm

There was a good article in the WSJ yesterday.

Check Your Withholding Math or Risk a Painful Tax Shock
Here’s why withholding matters so much this year.

The tax overhaul didn’t shift rates as much as some lawmakers proposed, but it made landmark changes to individual provisions. So the overhaul’s effects will vary widely among filers depending on which changes apply.
They run through a hypothetical example for a taxpayer with high itemized deductions in prior years:
Sarah is a New York resident. For 2017, she had $200,000 of wages and other income and $33,000 of itemized deductions, including $28,000 for state and local taxes. She owes about $41,400 of federal tax, and her withholding was set so that she’ll receive a tax refund for 2017 of about $100.

For 2018, Sarah has the same income and deductions, and she doesn’t adjust her withholding to account for the loss of $18,000 in state and local tax deductions. Her take-home pay rises by $5,300, reflecting the lower withholding in the 2018 tables.

The overhaul lowers Sarah’s total federal income-tax bill by about $520. But because her withholding went down so much, she’ll owe the IRS about $4,700 when she files in spring 2019. For many filers, such a balance due would be a bad surprise.
"Discipline matters more than allocation.” ─William Bernstein

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Re: 2018 Updated IRS Withholding Calculator Released

Post by nolesrule » Sat Mar 03, 2018 7:16 pm

There's definitely something wonky with the calculations and entering bonuses, or I entered the data incorrectly.

It calculated a good ballpark on my projected tax liability, but when I included bonuses, it calculated the expected withholding incorrectly and approximately doubled the amount of additional withholding we'd actually need. It's almost as if there had been no withholding expected for the bonuses at all.

When I removed the bonuses, the recommended additional withholding amounts were about what I expected based on my own calculations.

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Re: 2018 Updated IRS Withholding Calculator Released

Post by mega317 » Sun Mar 04, 2018 4:13 am

nisiprius wrote:
Thu Mar 01, 2018 1:29 pm
Do people need it?
Mnuchin told reporters “I don't think the majority of Americans need to do anything." .... Acting IRS Commissioner David Kautter said about 90 percent of taxpayers would have “some adjustment one way or the other”
Nisiprius, I think your point is lost on me, and this is not an attempt to get political, but Mnuchin or anyone else "telling reporters" doesn't really mean a darn thing. If you have a huge bill due or an under payment penalty, it's not as if you can appeal based on that. People should figure it out for themselves.

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iceport
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Re: 2018 Updated IRS Withholding Calculator Released

Post by iceport » Sun Mar 04, 2018 12:19 pm

^^^^I wholeheartedly agree, mega317.

More encouragement here: Michelle Singletary: Wage earners should use tax withholding calculator now
With the tax changes taking effect this year, you need to do this paycheck checkup. And no, you can’t wait and do it later.
"Discipline matters more than allocation.” ─William Bernstein

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tadamsmar
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Re: 2018 Updated IRS Withholding Calculator Released

Post by tadamsmar » Sun Mar 04, 2018 12:45 pm

I tried the calculator and it seems to give the wrong answer.

I wanted to get a read on the total income tax on a 170,000 AGI.

So I put in 170,000 a my salary, no withholding, married filing jointly.

I took the standard deduction.

I get 29,329 as my total tax.

But my tax for 2017 on ~170,000 AGI was only 23,739.

I wonder why I get that result?

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iceport
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Re: 2018 Updated IRS Withholding Calculator Released

Post by iceport » Sun Mar 04, 2018 2:24 pm

tadamsmar wrote:
Sun Mar 04, 2018 12:45 pm
I tried the calculator and it seems to give the wrong answer.

I wanted to get a read on the total income tax on a 170,000 AGI.

So I put in 170,000 a my salary, no withholding, married filing jointly.

I took the standard deduction.

I get 29,329 as my total tax.

But my tax for 2017 on ~170,000 AGI was only 23,739.

I wonder why I get that result?
I just plugged your numbers into the calculator and got a new tax liability of $23,999.
Based on your responses, your anticipated income tax for 2018 is $23,999.
:?

Filing Status: joint Someone else can claim you as a dependent: no
Number of jobs: 1 Number of dependents: 0
Will you be 65 or older 1/1/2019: no Are you blind: no
Spouse will be 65 or older on 1/1/2019: no Spouse blind: no
Child & dependent care credit qualifying persons: 0 Child & dependent care credit expenses: $0
Child credit qualifying children: 0 EITC qualifying children: 0
Other credits: $0
Total salary: $170,000 Total plans and cafeteria: $0
Total tax withheld to date: $0 Total tax withheld from last check: $0
Total earned income other than salary: $0 Nonwage income: $0
Adjustments to income: $0 Total itemized deductions: $0
Projected additional withholding if you do nothing: $0
"Discipline matters more than allocation.” ─William Bernstein

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Re: 2018 Updated IRS Withholding Calculator Released

Post by RetiredAL » Sun Mar 04, 2018 4:06 pm

Head up: Check your new withholding $..

I was at my elderly Dads yesterday doing prep work for meeting with his tax person this week. In his new mail, was a statement relating to his Military Retirement, stating that under the new withholding formulas, they were reducing his Fed Withholding by $160 dollars a month. Well, for 2016 his Fed refund was $70, For 2017, I'm concerned due to it being an unusually high Cap Gains year, but that is whole other issue.

He expects be itemizing again in 2018, due to his large amount of donations, thus we don't expect his tax bill will change much, so less withholding is not the direction we want to go.

Dad: 30 years in the Navy, WWII, Korea, Vietnam, and Cold War. Started as a Seaman, retired as a LCdr.

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tadamsmar
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Re: 2018 Updated IRS Withholding Calculator Released

Post by tadamsmar » Sun Mar 04, 2018 5:52 pm

iceport wrote:
Sun Mar 04, 2018 2:24 pm
tadamsmar wrote:
Sun Mar 04, 2018 12:45 pm
I tried the calculator and it seems to give the wrong answer.

I wanted to get a read on the total income tax on a 170,000 AGI.

So I put in 170,000 a my salary, no withholding, married filing jointly.

I took the standard deduction.

I get 29,329 as my total tax.

But my tax for 2017 on ~170,000 AGI was only 23,739.

I wonder why I get that result?
I just plugged your numbers into the calculator and got a new tax liability of $23,999.
Based on your responses, your anticipated income tax for 2018 is $23,999.
:?

Filing Status: joint Someone else can claim you as a dependent: no
Number of jobs: 1 Number of dependents: 0
Will you be 65 or older 1/1/2019: no Are you blind: no
Spouse will be 65 or older on 1/1/2019: no Spouse blind: no
Child & dependent care credit qualifying persons: 0 Child & dependent care credit expenses: $0
Child credit qualifying children: 0 EITC qualifying children: 0
Other credits: $0
Total salary: $170,000 Total plans and cafeteria: $0
Total tax withheld to date: $0 Total tax withheld from last check: $0
Total earned income other than salary: $0 Nonwage income: $0
Adjustments to income: $0 Total itemized deductions: $0
Projected additional withholding if you do nothing: $0
Using this calculator:

https://apps.irs.gov/app/withholdingcal ... index5.jsp

I think there must be a bug

I get the same as you if I say i am <65.

I think I am getting different results for the same input (except I put yes for over 65):

Based on your responses, your anticipated income tax for 2018 is $29,379.

Filing Status: joint Someone else can claim you as a dependent: no
Number of jobs: 1 Number of dependents: 0
Will you be 65 or older 1/1/2019: yes Are you blind: no
Spouse will be 65 or older on 1/1/2019: no Spouse blind: no
Child & dependent care credit qualifying persons: 0 Child & dependent care credit expenses: $0
Child credit qualifying children: 0 EITC qualifying children: 0
Other credits: $0
Total salary: $170,000 Total plans and cafeteria: $0
Total tax withheld to date: $0 Total tax withheld from last check: $0
Total earned income other than salary: $0 Nonwage income: $0
Adjustments to income: $0 Total itemized deductions: $0
Projected additional withholding if you do nothing: $0

When I just use the AGI, standard deductions, and the tax tables, I get a reasonable answer.
Last edited by tadamsmar on Sun Mar 04, 2018 5:59 pm, edited 1 time in total.

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iceport
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Re: 2018 Updated IRS Withholding Calculator Released

Post by iceport » Sun Mar 04, 2018 5:56 pm

tadamsmar wrote:
Sun Mar 04, 2018 5:52 pm
Using this calculator:

https://apps.irs.gov/app/withholdingcal ... index5.jsp

I think I am getting different results for the same input:

Based on your responses, your anticipated income tax for 2018 is $29,379.

Filing Status: joint Someone else can claim you as a dependent: no
Number of jobs: 1 Number of dependents: 0
Will you be 65 or older 1/1/2019: yes Are you blind: no
Spouse will be 65 or older on 1/1/2019: no Spouse blind: no
Child & dependent care credit qualifying persons: 0 Child & dependent care credit expenses: $0
Child credit qualifying children: 0 EITC qualifying children: 0
Other credits: $0
Total salary: $170,000 Total plans and cafeteria: $0
Total tax withheld to date: $0 Total tax withheld from last check: $0
Total earned income other than salary: $0 Nonwage income: $0
Adjustments to income: $0 Total itemized deductions: $0
Projected additional withholding if you do nothing: $0
There's one difference, in red above. (I didn't know.) Why does that make so much of a difference?

Also, I couldn't get your link to work. Did you try using the second link down in the OP?

Using your data, my link:

Based on your responses, your anticipated income tax for 2018 is $23,713.

Filing Status: joint Someone else can claim you as a dependent: no
Number of jobs: 1 Number of dependents: 0
Will you be 65 or older 1/1/2019: yes Are you blind: no
Spouse will be 65 or older on 1/1/2019: no Spouse blind: no
Child & dependent care credit qualifying persons: 0 Child & dependent care credit expenses: $0
Child credit qualifying children: 0 EITC qualifying children: 0
Other credits: $0
Total salary: $170,000 Total plans and cafeteria: $0
Total tax withheld to date: $0 Total tax withheld from last check: $0
Total earned income other than salary: $0 Nonwage income: $0
Adjustments to income: $0 Total itemized deductions: $0
Projected additional withholding if you do nothing: $0
"Discipline matters more than allocation.” ─William Bernstein

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tadamsmar
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Re: 2018 Updated IRS Withholding Calculator Released

Post by tadamsmar » Sun Mar 04, 2018 6:02 pm

iceport wrote:
Sun Mar 04, 2018 5:56 pm
tadamsmar wrote:
Sun Mar 04, 2018 5:52 pm
Using this calculator:

https://apps.irs.gov/app/withholdingcal ... index5.jsp

I think I am getting different results for the same input:

Based on your responses, your anticipated income tax for 2018 is $29,379.

Filing Status: joint Someone else can claim you as a dependent: no
Number of jobs: 1 Number of dependents: 0
Will you be 65 or older 1/1/2019: yes Are you blind: no
Spouse will be 65 or older on 1/1/2019: no Spouse blind: no
Child & dependent care credit qualifying persons: 0 Child & dependent care credit expenses: $0
Child credit qualifying children: 0 EITC qualifying children: 0
Other credits: $0
Total salary: $170,000 Total plans and cafeteria: $0
Total tax withheld to date: $0 Total tax withheld from last check: $0
Total earned income other than salary: $0 Nonwage income: $0
Adjustments to income: $0 Total itemized deductions: $0
Projected additional withholding if you do nothing: $0
There's one difference, in red above. (I didn't know.) Why does that make so much of a difference?

Also, I couldn't get your link to work. Did you try using the second link down in the OP?
I used the second link in the OP.

Being over 65 should decrease my taxes because it increases the standard deduction.

Seem like a bug.

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iceport
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Re: 2018 Updated IRS Withholding Calculator Released

Post by iceport » Sun Mar 04, 2018 6:07 pm

tadamsmar wrote:
Sun Mar 04, 2018 6:02 pm
I used the second link in the OP.

Being over 65 should decrease my taxes because it increases the standard deduction.

Seem like a bug.
That would be bad.

>65 reduced taxes for me. I don't know what's going on, tadamsmar. Firefox browser here, but I'm sure the calculator has been thoroughly tested on many.
"Discipline matters more than allocation.” ─William Bernstein

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tadamsmar
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Re: 2018 Updated IRS Withholding Calculator Released

Post by tadamsmar » Mon Mar 05, 2018 7:09 am

iceport wrote:
Sun Mar 04, 2018 6:07 pm
tadamsmar wrote:
Sun Mar 04, 2018 6:02 pm
I used the second link in the OP.

Being over 65 should decrease my taxes because it increases the standard deduction.

Seem like a bug.
That would be bad.

>65 reduced taxes for me. I don't know what's going on, tadamsmar. Firefox browser here, but I'm sure the calculator has been thoroughly tested on many.
I am using chrome

Ms. Lemon
Posts: 6
Joined: Tue Apr 10, 2018 9:30 pm

Re: 2018 Updated IRS Withholding Calculator Released

Post by Ms. Lemon » Tue Apr 10, 2018 10:06 pm

We are also experiencing the similar issue using the new IRS tax withholding calculator. We went down from two jobs to one job for 2018 tax year and I expected the tax amount to go down especially with new tax bracket table, we will go into a lower bracket. But the calculator resulted in little over $6000 short if we didn't change the withholding amount! Upon reading this forum, there a few things we can try plugging in the numbers differently or in different places to see if that will make a difference.

Initially, what flagged me as this IRS calculator result might be way off and there is a bug of sort or lack of clear instruction on how to plug in certain numbers was that I tried using TurboTax 2018 tax withholding calculator to compare and the result was drastically different from the one from IRS. TurboTax one was much more closer to what we expected. TurboTax one asks for different numbers (i.e. taxable income vs. gross income) and it seemed much clearer what number to plug in where. But hey IRS one should be the one official and legit, right??? Has anyone tried comparing different calculators out there? H & R Block one had a bug and wasn't working a couple days ago.

Nearly A Moose
Posts: 844
Joined: Fri Apr 22, 2016 5:28 pm

Re: 2018 Updated IRS Withholding Calculator Released

Post by Nearly A Moose » Wed Apr 11, 2018 9:32 am

Ms. Lemon wrote:
Tue Apr 10, 2018 10:06 pm
We are also experiencing the similar issue using the new IRS tax withholding calculator. We went down from two jobs to one job for 2018 tax year and I expected the tax amount to go down especially with new tax bracket table, we will go into a lower bracket. But the calculator resulted in little over $6000 short if we didn't change the withholding amount! Upon reading this forum, there a few things we can try plugging in the numbers differently or in different places to see if that will make a difference.

Initially, what flagged me as this IRS calculator result might be way off and there is a bug of sort or lack of clear instruction on how to plug in certain numbers was that I tried using TurboTax 2018 tax withholding calculator to compare and the result was drastically different from the one from IRS. TurboTax one was much more closer to what we expected. TurboTax one asks for different numbers (i.e. taxable income vs. gross income) and it seemed much clearer what number to plug in where. But hey IRS one should be the one official and legit, right??? Has anyone tried comparing different calculators out there? H & R Block one had a bug and wasn't working a couple days ago.
I ran the IRS withholding calculator, taxcaster, and the MMM spreadsheet (available on the Bogleheads wiki). They all came out to more or less the same expected total tax - within a thousand dollars or so. I only entered the big items - gross salary, pre-tax retirement contributions, pre-tax spending accounts and insurance, state taxes, and mortgage interest. I ignored dividends and cap gains. I also ignored charitable contributions and some small deductions I may or may not get anyway.

But I used only the IRS withholding calculator once I saw that the total tax numbers were coming out consistently. Has it been your experience that the total tax due is the same but the withholding numbers are not consistent?
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

Ms. Lemon
Posts: 6
Joined: Tue Apr 10, 2018 9:30 pm

Re: 2018 Updated IRS Withholding Calculator Released

Post by Ms. Lemon » Wed Apr 11, 2018 10:28 pm

Nearly A Moose wrote:
Wed Apr 11, 2018 9:32 am
Ms. Lemon wrote:
Tue Apr 10, 2018 10:06 pm
We are also experiencing the similar issue using the new IRS tax withholding calculator. We went down from two jobs to one job for 2018 tax year and I expected the tax amount to go down especially with new tax bracket table, we will go into a lower bracket. But the calculator resulted in little over $6000 short if we didn't change the withholding amount! Upon reading this forum, there a few things we can try plugging in the numbers differently or in different places to see if that will make a difference.

Initially, what flagged me as this IRS calculator result might be way off and there is a bug of sort or lack of clear instruction on how to plug in certain numbers was that I tried using TurboTax 2018 tax withholding calculator to compare and the result was drastically different from the one from IRS. TurboTax one was much more closer to what we expected. TurboTax one asks for different numbers (i.e. taxable income vs. gross income) and it seemed much clearer what number to plug in where. But hey IRS one should be the one official and legit, right??? Has anyone tried comparing different calculators out there? H & R Block one had a bug and wasn't working a couple days ago.
I ran the IRS withholding calculator, taxcaster, and the MMM spreadsheet (available on the Bogleheads wiki). They all came out to more or less the same expected total tax - within a thousand dollars or so. I only entered the big items - gross salary, pre-tax retirement contributions, pre-tax spending accounts and insurance, state taxes, and mortgage interest. I ignored dividends and cap gains. I also ignored charitable contributions and some small deductions I may or may not get anyway.

But I used only the IRS withholding calculator once I saw that the total tax numbers were coming out consistently. Has it been your experience that the total tax due is the same but the withholding numbers are not consistent?
After reading this forum, I realized I missed pre-tax expenses were supposed to go in under "Total Plans and Cafeteria". I somehow made an assumption that it was for HSA and FSA contributions, but not for traditional insurance premiums. With that correction, the numbers came out pretty close to what it is currently set to be withheld. :thumbsup When I did the TurboTax calculator it was easier for me to understand since it had me put in taxable income with those pre-tax expenses were already taken out of equation. The withholding numbers fluctuated a bit over the last few years but I imagine that is due to increase in pay or 401K contributions.

One question remains; what is "Allowance"? Our current withholding schedule has 3 allowances, but these calculators told me we should have 2 allowances, but the estimated withholding came out that we are on the right track. Is this because of the tax law change?

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