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Old 10-13-2014, 10:10 PM   #1
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Taxes

I will get a small pension check monthly and supplement that with 401k money. Would you recommend I go ahead and have the approximate annual tax bill of $4600 taken out of my monthly pension check? Or do you wait until the end of the year and send in a check for your federal taxes? Will I be penalized if I wait until the end of the year to pay my full tax bill?
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Old 10-13-2014, 10:33 PM   #2
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In most cases you'll be penalized if you wait until the end of the year. Either do quarterly estimated payments or have it withheld. There are threads on this, including a very recent one, if you search for something like "estimated taxes".
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Old 10-13-2014, 10:38 PM   #3
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First year for estimated taxes...
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Old 10-14-2014, 12:56 PM   #4
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Estimated Tax - When do you usually make the fourth payment of the year? - Page 2 - Early Retirement & Financial Independence Community
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Old 10-14-2014, 01:29 PM   #5
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If you have the tax withheld from your 401(k) distribution there is no penalty, even if all the withholding is on December 31. You could also have 1/12 of your projected tax withheld from your pension or even all of it at yearend. Finally you could make four estimated payments of $1,150 each.
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Old 10-14-2014, 02:30 PM   #6
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Publication 17 - Your Federal Income Tax (For Individuals) - Tax Withholding and Estimated Tax
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Old 10-14-2014, 03:34 PM   #7
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I prefer to have taxes withheld from my pension as I feel it is less trouble than having to worry with quarterly payments. I have online access for changing the fed tax amount so can adjust throughout the year if necessary.
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Old 10-14-2014, 03:45 PM   #8
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I prefer to have taxes withheld from my pension as I feel it is less trouble than having to worry with quarterly payments. I have online access for changing the fed tax amount so can adjust throughout the year if necessary.
If I had a pension, this is what i'd do too.
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Old 10-14-2014, 04:03 PM   #9
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I'm kind of leaning towards the pension check having taxes withheld. I will also have my health insurance premium held each month so no hassles with these 2 payments. Thanks for the advice and the threads dealing with taxes.
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