Originally Posted by Badger
I made the RMD transfer from my wife's tIRA to her taxable MM account today I'm pretty sure the quarterly IRS payments will cover all taxes this year since it shouldn't be much different that last year but next year with the new tax codes and me taking my first RMD that will be almost 2X that of my wife is a bit difficult to figure out.
Any ideas on how to determine quarterly tax payments for next year?
The easiest thing will be to use the safe harbor calculation of paying the prior years taxes, x1.1 if your income is over $150K, in four equal installments. It then doesn’t matter if you owe a bunch that first year there is a big jump in income and taxes. You won’t owe any penalties.
You can alternatively use these estimates for tax withholding from your RMD whether done quarterly or all at once near the end of the year.
The point is you don't have to worry about paying/withholding all (or even 90%) the taxes owed ahead of time the first year you have a big jump in taxable income. The safe harbor rules mean you just have to meet the prior year's taxes (or 110% or the prior year's taxes if higher income) to avoid penalty.
You probably want to set aside funds for the additional you'll owe on April 15 of the following year, so that it's not a nasty surprise.