Retirees Not Withholding Enough

Retirees Not Withholding Enough

The IRS has announced that retirees may not be withholding enough for taxes this year. There were lots of changes in 2018 that made previous withholding levels obsolete. You should get with an Enrolled Agent now to make adjustments and avoid penalties.

But How Do I Know if I’m One of Them?

How do you even check to see if you’re not withholding enough? The IRS designed a new withholding calculator for employees that are paid wages, but that’s not a very good option for retirees. The only good way to avoid a tax surprise is to conduct a projection based on your specific situation. Then, your Enrolled Agent will consider taxes already paid, taxes yet to be paid, and estimate total income and deductions to come up with an accurate projection.

What We Can Help You Do 

If the results of the projection show that you are lagging behind, you still have a bit of time to adjust withholdings or make estimated tax payments. With this in mind we’ve listed some things you’ll need to check up on:

Adjust pension withholding

  •  In order to change your pension withholdings, you’ll need your Enrolled Agent to fill out a specific form and give it to your pension plan provider.

Adjust IRA distribution withholding

  •  To change IRA withholdings, typically you can go online or call the account provider to update the withholding amount or percentage.

Adjust Social Security voluntary withholding

  •  To adjust the voluntary withholding on your Social Security payments, you need to fill out another form and return it to your local Social Security office by mail or in person.

Make an estimated payment to the IRS

  • If withholdings won’t be enough or you are worried about timing, then you can make a payment to the IRS directly. The IRS has a voucher that can be sent with the payment and needs to be postmarked by Jan. 15, 2019 to be applied to your 2018 taxes.

Remember, penalties can be added to your taxes if you don’t pay enough during the year, so it’s important to review your withholdings as soon as possible to avoid a surprise when you file your taxes. Sounds difficult? It can be. Please call us now to set up your appointment to review your tax situation.

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Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax & Accounting as well as an Enrolled Agent and a Certified Tax Resolution Specialist.
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Now What? I Got A Tax Notice From The IRS. Help! Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.

The book is available in paperback and ebook on https://Amazon.com
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For more on SFS Tax & Accounting Services, visit https://sfstaxacct.com/
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738 Colorado Avenue Stuart, FL 34994
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Phone: 772-337-1040
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https://twitter.com/SFSTax/
https://linkedin.com/company/sfs-tax-problem-solutions
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