I am completing my 2008 Fed Tax return. Because of "late in the year" RMDs from IRA accounts, I have seriously underpaid this year's tax burden, and, as a consequence, have begun to grapple with next year's Estimated Tax Payment calculations. Any insight, help or opinion from the forum would be helpful.
Setting the Stage: First, I have significant income, other than IRA distributions, which are uniformly spread throughout the year. Second, I would like to postpone all RMDs until late in the year (for tax deferral reasons). And third, I discovered late this year that I have the option to have Federal Tax withheld from the RMD(s).
My question to this forum is:
Is there a reference in the Tax Code which clarifies the options one has in claiming when the tax withheld from a IRA RMD should (can) be credited? Ideally, this may be a way to satisfy the "pay-as-you-go" philosophy of the Tax Code while postponing actually paying the taxes as long as possible. I have found hints on the internet that indicate that RMD withholding amounts are considered by the IRS to be paid in four equal installments on the estimated tax due dates, but have not found one word confirming this in the Tax Code.
If this information is valid, then I pose the additional question as to whether one could eliminate all tax withholding from income throughout the year and use the year-end RMD withholding option to satisfy the quarterly estimated tax payments.
Any answers, facts or opinions are greatly welcomed.
Jim-theDIYguy
Setting the Stage: First, I have significant income, other than IRA distributions, which are uniformly spread throughout the year. Second, I would like to postpone all RMDs until late in the year (for tax deferral reasons). And third, I discovered late this year that I have the option to have Federal Tax withheld from the RMD(s).
My question to this forum is:
Is there a reference in the Tax Code which clarifies the options one has in claiming when the tax withheld from a IRA RMD should (can) be credited? Ideally, this may be a way to satisfy the "pay-as-you-go" philosophy of the Tax Code while postponing actually paying the taxes as long as possible. I have found hints on the internet that indicate that RMD withholding amounts are considered by the IRS to be paid in four equal installments on the estimated tax due dates, but have not found one word confirming this in the Tax Code.
If this information is valid, then I pose the additional question as to whether one could eliminate all tax withholding from income throughout the year and use the year-end RMD withholding option to satisfy the quarterly estimated tax payments.
Any answers, facts or opinions are greatly welcomed.
Jim-theDIYguy