Quote Originally Posted by kathyc2 View Post
Does that take info effect the lower withholding? It's a little cumbersome to work with, but Pro has a utility to recommend withholding on W4's. The default is for it to be close to break even, but it's easy to trick it to produce the desired refund.

I played around a little with the IRS calculator and have one MAJOR gripe with it. It only looks as the amount withheld on last paycheck to calculate the remainder of the year withholding. That's fine if pay and withholding does not fluctuate much, but if the last paycheck happened to be high due to such things as a lot of overtime, it's overstating the refund people might be expecting. That said, the recommendation it produces did seems to be close to break even on scenarios I tested.
The Planner does not actually calculate the withholding, you have to input the taxable wage and the withholding and there lies the problem as you pointed out.

What I typically do is take the 2017 Taxable wage and adjust that if taxpayer will be receiving a bonus etc. and then apply the 2018 Annual Withholding Percentage (Table 7). That gets me close enough for the planner. If the taxpayer can provide me with a current paycheck stub, I will project that out and make some adjustments. I just want to be in the ballpark. For folks who have variable paychecks (sales people etc.0 they need to tell me where they will end up for the year, or I will use the 2017 W2.

Any client that I run a Planner, I tell them to come back at the end of 3Q for a free rerun!