Use this tax withholding calculator to determine whether you are likely to be on target for your 2025 tax liability based on your current withholding status. This will help you determine whether to increase or decrease the number of tax allowances you are claiming. Make adjustments to your employer W-4 form, if necessary, to more closely match your tax liability.
Afterwards, use our payroll calculator to help you answer, “How will payroll adjustments affect my take-home pay?”
Deciding to Adjust Your Withholdings
Your tax withholdings let you pay your taxes with every paycheck, instead of once a year. This helps you meet your tax obligations and makes taxes more affordable. Withholdings mean part of your paycheck is sent to the IRS, so they are getting money to put against your tax bill throughout the year.
The result of paying too much in withholdings is less take-home, which means waiting until your tax return to get your money. By having your money in hand, you could use it or even invest it to earn interest. If the government keeps it until the return, you are essentially offering them an interest-free loan. It’s important to realize what a large refund could be costing you.
While you don’t want to overpay withholdings, underpaying is also a problem. If you pay too little, you will get a big tax bill in the spring and may be stressed about having to pay a large lump sum at once. If you can’t pay all you owe, collection action may be taken against you. You’ll also have to pay interest, meaning you’ll end up paying more in taxes.
Aside from making adjustments with the new tax law, you may need to consider adjusting your withholdings if:
- You have recently inherited money
- You have a new job or new position
- Your income has changed
- You’re unemployed
- You get a second job or another source of income
- Your spouse’s job or employment situation changes
- You have gotten married
- You have purchased a house
- You have gotten divorced or widowed
- Your tax withholdings were incorrect last year, meaning you got a refund or a tax bill
- You have received a large financial gain
- The tax regulations have changed
Essentially, whenever something happens that could affect the amount of taxes you have to pay, you need to revisit your withholdings with HR or your payroll department to ensure you have the right amount withheld. It’s smart to get into the habit of evaluating your withholdings regularly to ensure you can stay alert to changes in your taxes.
If you find your withholdings need to be adjusted, it may be as simple as talking to payroll, or you may need to file W-4 Form with your employer.
How Much Fed Taxes Are Withheld From My Paycheck?
To figure out whether you’re paying too much or too little in withholdings, you need to understand how much your withholdings should be. This will depend on several factors, including your marital status, income, deductions and certainly the new tax law.
Since evaluating your tax obligations can be complex, use the Money Help Center free tax withholding calculator to determine what your withholdings should be. The free calculator lets you quickly evaluate your withholdings — all you need to do is answer a few questions to get unbiased information.
-Updated January 2025