• Maximum Withholding Percentage?

    From Rick@21:1/5 to All on Wed Sep 15 10:53:27 2021
    Is there a maximum amount a person can specify for tax withholding on an IRA distribution? For example, if a retired taxpayer (over-65) has
    under-withheld during the year on IRA distribution and doesn't want to file quarterly or estimated taxes or pay an IRS penalty, can he withdraw a
    specific amount from an IRA savings account in December and specify 100% withholding for taxes? Assume it's the kind of savings account where money can be withdrawn at any time.

    --
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  • From ira smilovitz@21:1/5 to Rick on Wed Sep 15 13:17:35 2021
    On Wednesday, September 15, 2021 at 10:58:15 AM UTC-4, Rick wrote:
    Is there a maximum amount a person can specify for tax withholding on an IRA distribution? For example, if a retired taxpayer (over-65) has
    under-withheld during the year on IRA distribution and doesn't want to file quarterly or estimated taxes or pay an IRS penalty, can he withdraw a specific amount from an IRA savings account in December and specify 100% withholding for taxes? Assume it's the kind of savings account where money can be withdrawn at any time.

    --

    Legally, the most you can withhold for taxes is 100% of the distribution. It's possible that some custodians have a lower maximum.

    Ira Smilovitz, EA
    Leonia, NJ

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  • From Stan Brown@21:1/5 to ira smilovitz on Wed Sep 15 20:25:16 2021
    On Wed, 15 Sep 2021 13:17:35 EDT, ira smilovitz wrote:

    On Wednesday, September 15, 2021 at 10:58:15 AM UTC-4, Rick wrote:
    Is there a maximum amount a person can specify for tax withholding on an IRA
    distribution? For example, if a retired taxpayer (over-65) has under-withheld during the year on IRA distribution and doesn't want to file quarterly or estimated taxes or pay an IRS penalty, can he withdraw a specific amount from an IRA savings account in December and specify 100% withholding for taxes? Assume it's the kind of savings account where money can be withdrawn at any time.

    Legally, the most you can withhold for taxes is 100% of the distribution. It's possible that some custodians have a lower maximum.

    One data point: Vanguard will withhold 0, 10%, or any higher amount
    that you specify. Apparently you can't have them withhold anything
    between 0 and 10%.

    https://personal.vanguard.com/pdf/s273.pdf?2210114361

    But don't forget: there's state withholding too, so you probably
    can't apply 100% of the distribution to Federal withholding. Some
    states don't allow you to opt out of state withholding if you're
    having Federal tax withheld. This table is about a year old, but will
    give you an idea:

    https://personal.vanguard.com/pdf/sarpsc.pdf

    --
    Stan Brown, Tehachapi, California, USA https://BrownMath.com/
    https://OakRoadSystems.com/
    Shikata ga nai...

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From Maria Ku@21:1/5 to All on Thu Sep 23 19:27:49 2021
    One can fill out W-4P to indicate the desired level of withholding, and to overcome the plan admin defaults.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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