IRS Releases Updated Withholding Calculator

Published March 13, 2026

The Internal Revenue Service (IRS) recently announced an update to the IRS Tax Withholding Estimator. This new version helps taxpayers account for recent tax law changes when determining the proper amount of federal income tax to withhold from their paychecks.

The revised online tool allows workers and retirees who have federal income tax withheld from wages, pensions or annuities to account for newly enacted deductions and tax benefits when calculating their withholding for the current tax year. The calculator may be particularly useful for taxpayers who have several jobs or a spouse who is employed. It is also helpful for taxpayers who have recently experienced a major life change that could impact filing status or dependents, those who receive income that is not subject to automatic withholding or those who owe additional taxes or have received a refund that was larger than anticipated.

The legislative changes from the One Big Beautiful Bill Act (OBBBA) are now reflected in the Estimator, including deductions related to tipped income and overtime pay as well as other adjustments. Since these provisions may significantly alter a taxpayer’s expected tax liability, the IRS updated the Estimator so that impacted taxpayers can better align their withholding with the new tax rules and avoid unexpected tax bills or larger-than-expected refunds moving forward.

The IRS encourages taxpayers to review their withholding periodically, particularly after major tax law updates, changes in employment or significant life events. After using the Estimator, taxpayers may adjust their withholding by submitting a revised Form W-4 to their employer or the appropriate withholding form for pensions or annuities. The updated tool is intended to provide clearer guidance related to the new tax provisions and to help taxpayers more accurately estimate their tax obligations for the year.

IRS 2026 Dirty Dozen Part 1

The Internal Revenue Service (IRS) recently released its annual Dirty Dozen list of tax scams for 2026. The IRS warned taxpayers, businesses and tax professionals to remain vigilant against evolving fraud schemes that threaten financial and personal information.

The annual list is part of a broader outreach effort coordinated through the Security Summit and was highlighted during National “Slam the Scam Day.” The list raises awareness of common scams that frequently intensify during the tax filing season but may occur throughout the year.

The first six scams of the Dirty Dozen generally involve making unusual or implausible claims.

1. Email and Text Phishing Scams — Taxpayers and advisors should be alert to phishing and smishing scams. Fraudsters send emails, direct messages or text messages that appear to come from the IRS. These communications often use alarming language, offer a phony tax refund or threaten the taxpayer with legal or criminal charges. The messages may include QR codes that link to fake IRS websites to “verify” accounts, personal information or to claim a refund. The IRS reminds taxpayers not to open attachments or click on links. In 2025, the IRS reported that there were more than 600 social media scammers.
2. AI-Enabled IRS Impersonation — Phone scams increasingly involve the use of artificial intelligence (AI). Scammers may use robocalls, voice mimicry and spoofed caller IDs to make calls appear to originate from the IRS or government agencies. The IRS reminds taxpayers that communication is typically initiated through the mail. The IRS will also not leave urgent prerecorded messages demanding payment. As a reminder, taxpayers should not rely on AI-generated responses to tax questions. Instead, taxpayers should visit the IRS website which has helpful and reliable resources.
3. Fake Charities — There are many reputable charities that serve those in need, particularly during a crisis or natural disaster. However, fraudsters will often set up fake organizations with similar names and take advantage of donors. The fraudster will also attempt to use the donor's personal information to commit identity theft. Donors can check out reputable organizations through a charity’s website. Taxpayers may also use the Tax Exempt Organization Search (TEOS) tool on IRS.gov to confirm a charity’s exempt status. It should be noted, however, that many religious organizations are not required to report and will not appear in the search.
4. Social Media Advice — There has been a dramatic growth of incorrect tax information on social media. This can mislead taxpayers and cause serious tax problems. The IRS notes that following erroneous advice can result in delayed refunds, IRS audits, penalties and legal consequences. Your best protection is to use IRS or tax professional social media sites. Both the IRS and many large tax preparer firms have YouTube channels with reputable advice.
5. Online Account Identity Theft — Many fraudsters may attempt to create an IRS Individual Online Account using stolen personal information. Bad actors may offer to help create an account on a taxpayer’s behalf. Do not accept third party help to create an IRS Online Account. A taxpayer can go to IRS.gov to set up the Individual Online Account and access their personal tax information. For security purposes, never share personal information or login credentials with any “helper.”
6. Undistributed Long-Term Capital Gains Claims — The IRS has identified an increase in improper claims involving Form 2439, which allows certain shareholders to claim a credit for taxes paid on undistributed long-term capital gains from regulated investment companies or real estate investment trusts. Some schemes involve overstated or fabricated claims tied to organizations that are not legitimate investment funds or real estate trusts, while others falsely associate the claims with well-known entities. Improper claims may result in refund delays, audits, penalties and potential enforcement actions.

Taxpayers and advisors should recognize that fraudsters are becoming more skillful in obtaining information from individuals. It is important for advisors to caution taxpayers to be on the lookout for these common scams. If individuals are not certain about an email, text or call, they should contact their qualified tax professional to verify the source.

IRS 2026 Dirty Dozen Part 2

The second half of the Dirty Dozen scams include obvious false or fraudulent claims.

1. Self-Employment Tax Credit — There are many social media posts that claim self-employed taxpayers can receive a "Self-Employment Tax Credit." Eligibility for this credit is closely scrutinized by the IRS. Many taxpayers do not qualify for this credit, and claiming this credit may delay refund processing.
2. Ghost Tax Return Preparers — Taxpayers should be careful to avoid "ghost" tax preparers. Ghost preparers typically refuse to sign a return or include their Preparer Tax Identification Number (PTIN) on the return. These unscrupulous preparers often charge a fee based on the size of the refund. The IRS reminds taxpayers to never sign a blank return.
3. Charitable Contribution Schemes — Some promoters encourage taxpayers to inflate charitable deductions for noncash charitable contributions. These schemes often involve inflated appraisals for syndicated conservation easements, art and collectibles. Taxpayers are promised substantial tax savings, but the IRS warns that noncash contributions must be supported by legitimate valuation and reporting.
4. Overstated Withholding — In this scheme, taxpayers are encouraged to fill out IRS Form W-2, Wage and Tax Statement with inflated income and withholding information. Some taxpayers have made up large income and withholding amounts and then file an electronic return claiming a substantial refund. Once again, the IRS software will generally check the withholding amounts and discover the false information. Some fraudsters claim the taxpayer can be successful with this false information by filing Forms 1099-R, 1099-NEC, 1099-DIV, 1099-OID and 1099-B. The IRS may delay processing to verify wages and withholdings against third party reported statements.
5. Spear-Phishing — Tax professionals and businesses continue to be targets of sophisticated email scams designed to gain access to sensitive financial information. These attacks often appear as messages from potential new clients or requests for tax documents and may contain malicious links or attachments intended to install malware or capture login credentials. The IRS and the Security Summit remind tax professionals to remain vigilant and strengthen cybersecurity protections. Suspicious emails may contain unexpected requests for confidential information, unfamiliar sender addresses, urgent payment demands or links to websites that do not clearly originate from IRS.gov.
6. Offers in Compromise (OIC) — The IRS Offer in Compromise program allows certain eligible individuals to settle federal tax debts with a payment plan or at a reduced amount. However, OIC companies, or “OIC mills,” often make claims that they can reduce a tax burden to near zero with an OIC and charge thousands of dollars as a fee, even to taxpayers who will not qualify under IRS guidelines. Many of these companies receive large payments. The taxpayers lose both their payment to the OIC mill and still owe thousands in back taxes and interest to the IRS.

In announcing the list, the IRS encouraged taxpayers to remain cautious about unsolicited communications and tax advice that appear too good to be true. The agency noted that criminals continually adapt their tactics to exploit taxpayers and emphasized that individuals should rely on trusted sources and qualified tax professionals when preparing returns or evaluating tax-related claims.

Applicable Federal Rate of 4.8% for March: Rev. Rul. 2026-6; 2026-11 IRB 1 (17 February 2026)

The IRS has announced the Applicable Federal Rate (AFR) for March of 2026. The AFR under Sec. 7520 for the month of March is 4.8%. The rates for February of 4.6% or January of 4.6% also may be used. The highest AFR is beneficial for charitable deductions of remainder interests. The lowest AFR is best for lead trusts and life estate reserved agreements. With a gift annuity, if the annuitant desires greater tax-free payments the lowest AFR is preferable. During 2026, pooled income funds in existence less than three tax years must use a 4.0% deemed rate of return. Charitable gift receipts should state, “No goods or services were provided in exchange for this gift and the nonprofit has exclusive legal control over the gift property.”