Tax laws and associated figures (like standard
deduction amounts, tax brackets, and contribution limits) are adjusted for inflation annually.
The 2024 W-4 Calculator on TurboTax is designed for the 2024 tax year, which you would have filed in early 2025.
It's difficult to say precisely when the TurboTax 2025 calculator will be available, as tax laws and software updates are subject to change.
However, based on past release patterns, here's some information:
- TurboTax typically releases updated versions of the calculators in mid-November
While the fundamental structure of the W-4 form itself hasn't changed dramatically since 2020, the underlying numbers that determine withholding do change each year.
Therefore, you absolutely can use the IRS Tax Withholding Estimator.
- 2025 Adjustments: For the 2025 tax year (which is what you're withholding for right now for paychecks received in 2025), there are inflation adjustments to:
- Standard Deduction: The standard deduction for single filers increased from $14,600 in 2024 to $15,000 in 2025.
- Tax Brackets: The income thresholds for each tax bracket have been adjusted upward.
- 401(k) Contribution Limits: The 401(k) employee contribution limit increased to $23,500 for 2025 (from $23,000 in 2024).
- Other deductions/credits: Various other deductions and credits also see inflation adjustments.
What to do:
- Go to the IRS Tax Withholding Estimator: Search for "IRS Tax Withholding Estimator" on IRS.gov or use this direct link: https://www.irs.gov/individuals/tax-withholding-estimator
- Gather Your Information: Have your most recent paystub, your most recent tax return (your 2024 return if you've already filed it, or your 2023 return if not), and estimates of your annual income, bonuses, and 401(k) contributions for 2025.
- Input Your Data: Carefully enter all your information into the IRS tool. Be sure to accurately reflect:
- Your filing status (Single).
- Your total expected income for 2025, including your base salary and estimated quarterly bonuses.
- Your total estimated 401(k) contributions for 2025.
- Any other pre-tax deductions or significant itemized deductions you anticipate.
- Review the Recommendation: The estimator will give you a clear recommendation on how to fill out your W-4 (specifically the amounts to enter in Step 4(b) for deductions and potentially Step 4(c) for additional withholding or Step 4(a) if you have un-withheld income).
- Submit a New W-4: Provide the updated W-4 to your employer's HR or payroll department.
Helpful Links:
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Terri Lynn
