The Internal Revenue Service (IRS) has introduced an updated Tax Withholding Estimator, designed to help taxpayers and retirees figure out how much federal income tax should be taken out of their paychecks. The tool was updated following recent tax law changes, which included no federal tax on tips or overtime pay, and other updates that may affect how much people owe. The IRS believes matching the right amount of withholding to what a person will owe can help avoid penalties for underpaying taxes and increase their take-home pay during the year. The estimator takes about 20 to 25 minutes to complete and recommends users having recent pay stubs and a copy of the most recent federal tax return on hand.