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Old 03-16-2021, 05:53 AM   #21
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I currently set withholding in my pension to cover all of our income (my IRA and TSP, dividends and CGs from taxable, DW's SS and pension). When DW starts RMDs in a few years most of her withdrawals will go back into savings. At that point I will probably drop the pension withholding and do the whole shebang in the fall through 401K withholding as others mentioned.
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Old 03-16-2021, 08:02 AM   #22
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We have automatic withholding monthly on SS and on a small annuitized insurance policy. Also if/when I withdraw from our tIRA for other annual expenses. That covers the taxable portion of our expenses. When we make a Roth Conversion, we calculate the additional taxes required and make 2 tIRA withdrawals, the first is the conversion amount (100% converted) the 2nd is the tax amount where 100% is withheld. It always seems to work out where we get a couple dollars back when we file taxes. When I was self employed and paid taxes quarterly I was caught with a late payment once or twice. The late payment was not a big dollar amount 10-20 dollars IIRC.
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Old 03-16-2021, 08:17 AM   #23
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Our tIRAs are at Vanguard. We take an automatic monthly withdrawal. Vanguard offers an option to withhold any amount of federal and state taxes one chooses, which is what we do.
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Old 03-16-2021, 09:52 AM   #24
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I've only been retired for 14 months but I waited until to December to have taxes withheld from my IRA distribution. I got back a $74 refund so I was pretty close in my calculations. I'm currently under a 10% effective tax rate.
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Old 04-13-2021, 05:56 AM   #25
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OP here.
I have had my 401K moved into my IRA. My plan is to start pulling from my IRA funds at Fidelity very soon now.

A few more questions ...

I plan to do some lumpy withdrawals. Can Fidelity do tax witholdings for me or, do I have to pay them myself to the IRS?

Also, can I make estimated tax payments anytime during the year or, do they have to be on a quarterly basis?

Thx.
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Old 04-13-2021, 06:03 AM   #26
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Originally Posted by OldShooter View Post
I calculate our safe harbor amount, 110% of last year's taxes -- both federal and state. In early December I then withdraw that amount from the IRAs with 100% withholding.*

Never a reason to estimate anything unless the safe harbor amount makes you unhappy. No reason to pay them prior to December if you can pay it as withholding from an IRA.

*Actually slightly less than 100% because Schwab won't do 100.0%. But close enough.
That’s what we do now, although. I’ve also withheld taxes from my pension.
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Old 04-13-2021, 07:02 AM   #27
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Quote:
Originally Posted by albireo13 View Post
OP here.
I have had my 401K moved into my IRA. My plan is to start pulling from my IRA funds at Fidelity very soon now.

A few more questions ...

I plan to do some lumpy withdrawals. Can Fidelity do tax witholdings for me or, do I have to pay them myself to the IRS?

Also, can I make estimated tax payments anytime during the year or, do they have to be on a quarterly basis?

Thx.
Fidelity probably can do the withholding for you. You might even be able to set a percentage - say 17% or whatever you want.

You can make estimated tax payments any time during the year. Just keep good track for your records so you can reflect those payments on your tax return next year to get credit for making them.
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Old 04-13-2021, 07:13 AM   #28
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Quote:
Originally Posted by albireo13 View Post
OP here.
I have had my 401K moved into my IRA. My plan is to start pulling from my IRA funds at Fidelity very soon now.

A few more questions ...

I plan to do some lumpy withdrawals. Can Fidelity do tax witholdings for me or, do I have to pay them myself to the IRS?

Also, can I make estimated tax payments anytime during the year or, do they have to be on a quarterly basis?

Thx.
You can make them anytime, but for determining whether you are subject to a penalty, estimated tax payments are still bookkept in the quarterly regime i.e., April 15, June 15, Sept 15 and Jan 15

So if you made payments for example on January 23, March 11 and on April 15, all of those payments are considered first quarter estimated tax payments due by April 15, unless designated for a subsequent quarter.
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Old 04-13-2021, 08:31 AM   #29
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Yeah I think Fido is very flexible and can withhold for state as well as Federal. I think theyíll even go up to 90 or 100%. None of my credit union IRAs can do state withholding so Iím thinking of maybe using transfers to Fido before taking distributions but thatís been a problem too.
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Old 04-13-2021, 09:18 AM   #30
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I usually have Fidelity withhold 20% from each of my IRA withdrawals. I live in Texas, so no state withholding to worry about.

I also have voluntary withholding from our social security payments.
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Old 04-13-2021, 09:23 AM   #31
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Originally Posted by albireo13 View Post
I was just curious how folks like to manage taxes on tax-deferred fund withdrawals. Do you create witholdings and pay estimated taxes quarterly?
Just wait until end of year and pay a wopping chunk to IRS at tax time?
Can witholdings be set up automatically to be sent to IRS for withdrawals?

Most of our nestegg savings are tax deferred ... 401K, 403B, IRA. I am recently retired and we haven't yet touched savings but, envision doing so in the near future. I will have to figure out how best to reconcile the taxes.
What I do is estimate our total taxes for the year and adjust the withholding from my pension so that by the end of the year that an amount about equal to what I expect to owe will be withheld.

It is easier for me than making estimated payments.

In that past I have done a tIRA withdrawal in December with 99% of the amount withheld in lieu of making estimated payments since withholding are treated as being made evenly throughout the year even if they are done in December for underpayment penalty purposes.
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dealing with taxes on nestegg withdrawals?
Old 04-13-2021, 09:58 AM   #32
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dealing with taxes on nestegg withdrawals?

Fidelity lets you specify withholding percentages for Federal and State tax up to 99%. You can now do it from the mobile app under Transact > Transfer.

I try to do all of my withholding this way so I donít need to bother with the timing of estimated tax payments. Withholding is considered received equally throughout the year, regardless of when it occurs.
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Old 04-13-2021, 11:23 AM   #33
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Other than this year, my income as been fairly stable so I figured out what % I have paid in the last few years, averaged it and then had that amount plus a couple of percent over.
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Old 04-13-2021, 09:03 PM   #34
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FIDO can do tax withholding, there is a dropdown box when you do the withdrawal...I think the default is 10%?

As for the quarterly dates, they are set by the IRS and are firm (except for rare instances like pandemic delay lol).
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Old 04-14-2021, 07:33 AM   #35
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Awesome. Thank you for the info.
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