An online calculator tool released by Internal Revenue Service (IRS) on February 27 will help Americans to make sure that they are not overpaying or underpaying their taxes as per the new GOP instituted tax law. This software permits the taxpayers to compare the amount of money their employer withholds from their pay to the government mandated amount. The software takes into account a number of variables like the household size and income. The intention is to assist workers verify what their employers are up to. This calculator will help employees to prod bosses if the numbers mismatch.
According to Mark Mazur of Tax Policy Center, a non-partisan outfit, the IRS wants people to know how much they owe to the government. The IRS does not want the US taxpayer to have any kind of nasty surprises.
The December passage of the GOP tax law pushed in radical changes to the tax code. Millions of businesses and families enjoyed lowered rates. The standard deduction amount almost doubled for middle-income workers. Businesses have also tried to match the federal tax payments of their employees with the amount they will pay as per the dictates of the new system. All of these compelled the coding of the new online calculator.
Simple and easy to use
Secretary Steven Mnuchin, in a Treasury Department news conference, did not give much credence to the confusion generated by this new law. He pointed out that withholding tables which were released in January worked quite well for a large proportion of Americans. He said that this particular tool was mostly intended for those households that have specifically complicated tax situations. He assured that most Americans have no need to use this tool.
David Kautter, the acting IRS Commissioner, said that approximately 90 percent of the taxpayers will have to adjust a little when it comes to their withholdings. It can be hard, however, to determine exactly how many taxpayers would have to do so. He said that in households where both spouses have incomes must use this new tool. This would enable the understanding of the doubling of Child Tax Credit. Kautter assured that the online calculator tool is more or less a simple one. The software does an excellent job of taking a complex law and breaking it into simple, digestible terms. He hoped that most Americans will find it extremely helpful, even if the withholding is not changed.