Fed Tax E-File Rejected - An Update

[Senator]

We need a new system:
You do your return, the IRS validates it, and then sends you a bill for the total taxes for the year, and you pay it to the one address for entire country.
No refunds needed. No $5 Billion/yr scammers.

I suspect it would have more to do with a huge uproar over the taxes that would be needed to be paid. And people would not have the money as a secondary reason.

 

[spncity]

Interestingly, and totally off topic, I have discovered that DW is a first marshmallow eater. We hadn't watched any of the last season of Downton Abbey until recently. But we've been watching an episode every night or so recently. Tonight we watched the next to the last one, finishing at 10:30. I turned the TV off, planning to enjoy the final episode in a day or two. She insisted we finish the series tonight, she absolutely can't wait even though the show won't be over until midnight. Truthfully, I enjoyed it, although I'd have been fine with waiting for a day or so to reach the end. Just another interesting insights into the different personalities that exist in the world.

She might have waited if she were promised an extra episode beyond the last one!

 

[iac1003]

I take RMD on IRA and I am not subject to any percentage (much less 20%) withholding. I have an optional withholding but I do not elect to do so.

DH's TIAA-CREF 401k gives him an option of 10% or 20% withholding. For the 2016 tax year we might be getting some of that back for the first time.


Sent from my iPhone using Early Retirement Forum

 

[aja8888]

I'm surprised there are so few laments about mandatory 20% withholding on IRA/401k withdrawals. I did great keeping my own money in the W2 days, but there seems to be no way out of the 20% thing.

I take RMDs and elect to have no tax witholding. I pay estimated taxes each quarter.

 

[ERD50]

I take RMDs and elect to have no tax witholding. I pay estimated taxes each quarter.

My mother and my MIL both take RMDs, and do not have anything withheld. The do pay estimated taxes quarterly.

-ERD50

 

[sengsational]

I haven't experienced that 20% withholding since I have yet to take IRA withdrawals, but there is not withholding on Roth conversions so why couldn't one just do a Roth conversion and then withdraw from the Roth as a workaround?

Why is it mandatory? I have been withdrawing from my IRA since 2010 and have declined to have Schwab withhold anything.

I believe that 401k's have the required 20% withholding on distributions.

gauss got it. My comment was lacking information about the fact that this was a 401k pull.

But I think I now understand why there is no lamenting: the only ones that can't do the Roth conversion trick are those of us between 55* and 59.5.

EDIT: Thinking more about it, if I ran the money through my Roth, that would be less money in my Roth later, and Roth's are the best type of account to delay pulling from, right? I think from now on, if I pull from the 401k, I'll do it in December so I'll get my money back in just a few months.

* Possibly as young as 54.01 for a late December birthday, but we won't go there.