- Joined
- Apr 14, 2006
- Messages
- 23,183
I'm trying to plan out my strategy for withdrawing money from a taxable IRA.
Assume I have no other income for the year and, in late December of 2019, I pull out $100k from my IRA, all of which is taxable. Suppose I then file my tax return before January 15, 2020 and pay the full amount due on that withdrawal. Will I face an under withholding penalty? In other words, do I need to anticipate the withdrawal and pay the three earlier installments of estimated tax over the course of 2019, or does the obligation to pay estimated tax not get triggered until I take the money in December? (In which case it would only be due in January (I think)).
Now for a slight twist. Suppose I have been receiving social security or pension income over the course of 2019 and have been withholding all along from each check. I then make the $100K IRA withdrawal in late December. Does that change the situation?
Thanks in advance for your thoughts.
Assume I have no other income for the year and, in late December of 2019, I pull out $100k from my IRA, all of which is taxable. Suppose I then file my tax return before January 15, 2020 and pay the full amount due on that withdrawal. Will I face an under withholding penalty? In other words, do I need to anticipate the withdrawal and pay the three earlier installments of estimated tax over the course of 2019, or does the obligation to pay estimated tax not get triggered until I take the money in December? (In which case it would only be due in January (I think)).
Now for a slight twist. Suppose I have been receiving social security or pension income over the course of 2019 and have been withholding all along from each check. I then make the $100K IRA withdrawal in late December. Does that change the situation?
Thanks in advance for your thoughts.