Saul Loeb | AFP | Getty Images
U.S. Treasury Secretary Steven Mnuchin speaks at a daily press briefing at the White House in Washington, DC, on January 11, 2018.
The IRS has launched its new income tax withholding calculator, giving workers guidance on how much they should deduct for these levies under the new law.
This is the latest step the tax collection agency is taking to reflect changes stemming from the Tax Cuts and Jobs Act. The new legislation has increased the standard deduction, done away with personal exemptions and trimmed income tax rates.
“This is really about creating a tool for American taxpayers to double-check their withholding,” Mnuchin said of the calculator.
Though the calculator is designed to work for wages, it includes a line that will allow users to input income from self-employment or other nonwage sources.
It’s a good practice to take a look at your withholding to make sure you’re deducting the correct amount of taxes under the new legislation.
“You don’t want a big refund, where you’re giving an interest-free loan to the government,” said Melissa Labant, director of tax policy and advocacy at the American Institute of Certified Public Accountants.