IRS issued a warning to those who receive a pension in the US

The U.S. Internal Revenue Service (IRS) has a message for retirees: Make sure you're paying the correct amount of federal income tax. Last December's Tax Cuts and Jobs Act changed income tax calculations for most filers—and it's not just working U.S. residents who need to double-check the amount.

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The Republican tax plan, known as the GOP tax bill, lowered the top individual rates from 39,6% to 37%, and the first threshold also dropped slightly by about 3%, he said. Time Chris Baker, a certified financial planner at Financial Advisors Oaktree in Carmel, Indiana. This means that on average most retirees will probably notice a reduction in tax liabilities and will owe a little less, although this depends on individual circumstances.

Retirees who receive monthly pension payments or annuity checks may need to increase or decrease the amount of taxes they pay. While most retirees choose to withhold taxes on every paycheck they receive, others choose to receive the entire amount and make quarterly estimated payments to the IRS. The deadline for the third quarter was September 17, and the next one is January 15, 2019.

If you pay too much, there may be a large overpayment, requiring a refund. And if you pay less, you’ll have to give the IRS more money next spring.

“Make sure you don't have a large balance owed—or you could be penalized for underpaying your taxes,” says April Walker, lead manager of tax practice and ethics at the American Institute of CPAs.

The easiest way to simplify your tax payments and enjoy a relaxed retirement is to use IRS online calculator, which already takes into account the new rules of tax law changes. Like salary workers, retirees can use this tool to estimate their total income, deductions and tax credits for 2018 a year.

Retirees should use their income figures just as they would a salary - enter the payment amounts and indicate how often they receive them.

Based on this information, the calculator will give you the information recommended by you personally. You can change the amount of the hold at any time by contacting your payer and submitting a new form W-4P.

Be sure to consider the social security factor in your expected retirement income, Baker says. Those who have recently retired and have mixed income sources that differ from last year may need additional assistance from certified auditors or tax advisors.

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