REPORT: IRS Warning: Retirees at risk of tax penalty
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The IRS has a new warning for retirees, and while it’s not about a scam it could end up costing older taxpayers more money than they expect to pay.
The agency issued a statement urging Americans to check the amount being withheld from retirement accounts and monthly pension or annuity checks, as soon as possible, in order to avoid a penalty next year.
The article goes on to state the following:
Since the year is almost over, the IRS said those who discover they have been paying too little, might need to make a quarterly estimated or additional tax payment directly to the agency.
According to a simulation conducted by the Government Accountability Office (GAO) in August, which reviewed the revised federal tax withholding tables for 2018 implemented by the IRS and the Treasury Department, 21 percent of workers are at risk of having their taxes underwithheld – 3 million more than projections based on the old tax code.
Only 6 percent of taxpayers are expected to have wages accurately withheld, while 73 percent are likely to have their taxes overwithheld. The former is three percentage points less than a simulation conducted using the same withholding structure and the old tax code. Accurate withholding was assumed to be within $100 of what is truly owed.
🚨 This is an alarm bell for the nearly 30 million households that are expected to owe MORE money come tax time this spring. https://t.co/yW8IIz6Gew
— Ron Wyden (@RonWyden) July 31, 2018
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