Sarah Marcus, Director of Payroll and Compensation
Prevent any unexpected tax liabilities by checking your federal income tax withholding early this year. You can view and edit your current tax setup through Paycom at employee.uco.edu. Also, the IRS provides a Tax Withholding Estimator on IRS.gov.
This online tool helps individuals avoid having too much or too little tax withheld from their wages. Having too little withheld can result in a tax bill or even a penalty at tax time. Having too much withheld results in less money in your pocket. The estimator can help you get to a balance of zero or a desired refund amount.
Taxpayers can use the results from the Tax Withholding Estimator to determine if they should:
- Complete a new Form W-4, Employee’s Withholding Allowance Certificate
- Make an additional or estimated tax payment to the IRS
The Tax Withholding Estimator asks taxpayers to estimate:
- Their 2022 income
- The number of children they will claim for the child tax credit and earned income tax credit
- Other items that will affect their 2022 tax return when they file in 2023
The Tax Withholding Estimator does not ask for personally identifiable information, such as a name, Social Security number, address, and bank account numbers. The IRS doesn’t save or record the information entered in the Estimator.
Before using the Estimator, it can be helpful for taxpayers to gather applicable income documents including:
- Their pay stubs
- Form W-2
- Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan
- Form 1099-K, 1099-MISC
- Form 1099-INT for interest received
- Other income documents and records of virtual currency transactions
These documents are not needed to use the estimator but having them will help taxpayers estimate 2022 income and answer other questions asked during the process Additionally, the Tax Withholding Estimator results will only be as accurate as the information entered.
We cannot provide specific tax advice, so if you have additional questions, we recommend that you reach out to your tax professional.