The biggest change with regard to paying taxes is the need for retirees to pay estimated taxes. Generally, while you are working, your employer withholds a certain amount of your income, and remits the appropriate amount to the IRS and your state’s treasury for your taxes due. But when you retire, you must begin to make these remittances yourself. You do this by paying a tax estimate, depending on your retirement income, and filing an IRS Form 1040-ES every quarter.