The IRS urges taxpayers to review tax withholding for 2023.

As 2023 quickly draws to a close, the Internal Revenue Service (IRS) encourages taxpayers to review their tax withholding as soon as possible to avoid potential surprises when filing their taxes next year. 

While it's best for taxpayers to check their withholding at the beginning of the year, an adjustment made in the final weeks of 2023 can help avoid unexpected outcomes when filing taxes next year, such as a substantial refund or balance due. With only a few weeks left in the year, the IRS urges people who haven't reviewed their withholding recently to do so immediately to make any necessary adjustments. The IRS offers several ways to help with this. 

Tax Withholding Estimator 

The Tax Withholding Estimator can help taxpayers determine if too much income tax has been withheld and how to adjust their tax withholding. In other cases, it can help taxpayers determine whether they should withhold more or make estimated tax payments to avoid a tax bill when filing their 2023 tax return. 

The tool provides workers, retirees, the self-employed, and other taxpayers with an easy, mobile-friendly way to calculate the correct amount of income taxes they should have withheld from their wages and pension payments based on their full set of facts and circumstances. 

Options for Income-Earning Taxpayers 

Typically, taxes are paid throughout the year, and employers withhold income tax from their employees' wages, sending it to the IRS on behalf of employees. However, approximately 70% of taxpayers withhold excess taxes each year, which usually results in a refund. The IRS recommends people with income not subject to withholding, such as renting property, working in the gig economy or self-employment, to consider making quarterly estimated tax payments to avoid undue balances or penalties when filing. Taxpayers can make these payments using Form 1040-ES, either by mail or through online payments, by phone or through the IRS2Go mobile app. They can also manage their estimated tax payments and view their payment history and tax records through their online account, which they can create in IRS.gov/account. 

Other Factors Affecting 2023 Taxes 

 
Certain unexpected life events may require adjustments in tax withholding. These events include changes such as marriage or the birth of a child, job loss, and natural disasters such as wildfires and hurricanes. It is highlighted that a tax refund is not guaranteed, and proper withholding adjustments can help increase net income rather than over-withholding and receiving a refund. It is advised to file electronically and opt for Direct Deposit to receive a refund more quickly, usually within 21 days, although some may take longer for a variety of reasons. 
 
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