Estimated Taxes for Rollover IRA RMD’s

Submitted by Jane Ackerman on Sat, 2015-02-07 22:54

I have just turned 70 1/2 and will be taking my first RMD from my Rollover IRA by the end of this year. I assume it would be best to make estimated tax payments for my federal and state taxes starting in April, so I would not be charged any penalties for not having had enough money withheld this year. Or is there a better way to do this?



Submitted by Alan - IRA critic on Sat, 2015-02-07 23:55

  • There are “safe harbors”, one of which is paying quarterly estimates of 25% of your 2014 tax liability (27.5 for higher incomes). Then no matter how much you owe there will be no penalty.
  • Another frequently used method that avoid quarterly estimates is to withhold from the RMD the amount needed to meet the safe harbor. You can even take the RMD in December and the withholding is treated as if it was paid in quarterly estimates for all 4 quarters.

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