This Illinois 401k calculator helps you plan for the future. Your 401k plan account might be your best tool for creating a secure retirement. Why? You only pay taxes on contributions and earnings when the money is withdrawn. Plus, many employers provide matching contributions. Use this calculator to see how increasing your contributions to a 401k can affect your paycheck and your retirement savings. See payroll calculation FAQs below.
Frequently Asked Questions
Is there a limit to 401k contributions?
Yes there’s an annual limit. For 2023, the limit is $22,500 per year. For 401(k) Catch Up Contribution (over age 50) the limit is $7,500 ($30,000 total).
What’s the difference between single and head of household?
Someone who qualifies as head of household may be taxed less on their income than if filing as single. This is because the tax brackets are wider meaning you can earn more but be taxed at a lower percentage. This status applies for people who aren’t married, but adhere to special rules. If you’ve paid for more than half the cost of your household (with a qualifying dependent), consider this status. Be sure to double check all the stipulations before selecting, however. Picking the wrong filing status could cost you time and money.
What was updated in the Federal W4 in 2020?
In 2020, the IRS updated the Federal W4 form that eliminated withholding allowances. The redesigned Form W4 makes it easier for your withholding to match your tax liability. Here’s how to answer the new questions:
Step 2: check the box if you have more than one job or you and your spouse both have jobs. This will increase withholding.
Step 3: enter an amount for dependents.The old W4 used to ask for the number of dependents. The new W4 asks for a dollar amount. Here’s how to calculate it: If your total income will be $200k or less ($400k if married) multiply the number of children under 17 by $2,000 and other dependents by $500. Add up the total.
Step 4a: extra income from outside of your job, such as dividends or interest, that usually don't have withholding taken out of them. By entering it here you will withhold for this extra income so you don't owe tax later when filing your tax return.
Step 4b: any additional withholding you want taken out. Any other estimated tax to withhold can be entered here. The more is withheld, the bigger your refund may be and you’ll avoid owing penalties.
If your W4 on file is in the old format (2019 or older), toggle "Use new Form W-4" to change the questions back to the previous form. Employees are currently not required to update it. However if you do need to update it for any reason, you must now use the new Form W-4.
The calculators on this website are provided by Symmetry Software and are designed to provide general guidance and estimates. These calculators should not be relied upon for accuracy, such as to calculate exact taxes, payroll or other financial data. Neither these calculators nor the providers and affiliates thereof are providing tax or legal advice. You should refer to a professional adviser or accountant regarding any specific requirements or concerns.