If you are an employee and unsure whether you’re having too much or too little Federal Income Tax withheld from your pay, the IRS Withholding Calculator is the perfect tool for you.  Instead of guessing on how much to withhold from your pay or relying on advice from others, the Withholding Calculator is extremely useful.

Employees can also benefit from the IRS Withholding Calculator:

• to reduce their tax refund or their balance due
• to determine if they need to increase their withholding due to the Making Work Pay provision in the American Recovery and Reinvestment Act of 2009, that caused changes to the federal income tax withholding tables and may result in too little tax being withheld when they are in a situation when withholding is only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit)
• when non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures.

Warning: If you will be subject to alternative minimum tax, self-employment tax, or other taxes; or if any of your current jobs will end before the end of the year, you will probably achieve more accurate withholding by following the instructions in Publication 919, How Do I Adjust My Tax Withholding?

To change your withholding simply use the results from the withholding tax calculator to help complete a new Form W-4, Employee’s Withholding Allowance Certificate; then submit the completed form to your employer.

source: irs.gov