I'm just curious what some other people do. Do you withhold taxes on your investment dividends? Or do you do quarterly estimates?
Thanks!
Same for me, except I use part of my RMD's to pay estimated taxes, both state and federal. I live in California, and it is my rent payment for being able to live here.I'm doing RMD's (5 years now) and between those and SS, I estimate next year's tax bill (Fed) and set up 4 estimated tax payments through the online EFTPS site. Like Audreyh1, I pay from a high yield savings account.
I don't pay state income tax (Texas).
No. In late December I estimate what my total tax for the year will be and I then do a tIRA withdrawal with high withholdings for federal and state income taxes to make estimated tax payments.... but because these taxes are paid in the form of withholdings the IRS considers it as having been done ratably throughout the year for the purpose of underpayment penalties even though it happens in December.
quarterly payments based on 100% of the previous year's tax bill/4. we live on our pensions and sock away social security and other minor income streams for those payments. simple, EZ and stress free.I'm just curious what some other people do. Do you withhold taxes on your investment dividends? Or do you do quarterly estimates?
Thanks!
I looked on Vanguard and didn't see an option. I make estimated quarterly payments.Are you asking about having the brokerage withhold taxes for you? I don’t think that’s and option on taxable accounts.
No. In late December I estimate what my total tax for the year will be and I then do a tIRA withdrawal with high withholdings for federal and state income taxes to make estimated tax payments.... but because these taxes are paid in the form of withholdings the IRS considers it as having been done ratably throughout the year for the purpose of underpayment penalties even though it happens in December.
Most of our income is from pensions, so we have extra taxes withheld from those to cover investment income. We have Vanguard w/h tax from Mr. A.'s yearly RMD.