Retirees Tax Surprise From New Law Warned by IRS

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Retirees face a big tax surprise if they haven’t withheld enough from their pension or annuity income, the IRS has warned, noting the penalty for failing to pay the proper amount of estimated taxes.

With tax reform bringing about major changes for the year ahead, the IRS embarked on an awareness campaign, and last week started telling retired filers to ensure they avoid an estimated tax penalty.

The Tax Cuts and Jobs Act, which went into effect in December, drastically altered how tax is calculated, not just for regular taxpayers but retirees as well.

As a result, the majority of taxpayers have to change the amount of …

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