A large tax refund can feel exciting, while an unexpected tax bill can create stress. Both situations may indicate that the amount withheld from your paycheck needs attention.

The IRS Tax Withholding Estimator now reflects current changes involving deductions for qualified tips, overtime, eligible car-loan interest and qualifying seniors. The free tool can help workers and retirees estimate whether their federal withholding is close to the amount they may owe.

Consider checking your withholding after marriage, divorce, the birth of a child or a major income change. It is also helpful for households with two earners, people holding multiple jobs and workers receiving freelance or investment income.

Before starting, gather recent pay statements and your latest federal tax return. Enter the information carefully because inaccurate numbers can produce an unreliable estimate.

If the tool recommends a change, employees can submit a new Form W-4 to their employer. Retirees receiving periodic pension or annuity payments may need Form W-4P.

The goal is not necessarily to create the largest possible refund. A large refund may mean too much money was withheld throughout the year. Reducing excessive withholding could increase take-home pay, although it must be done carefully to avoid underpayment.