IRS Form W-4P

Submitted by Heidi Quinn on Sat, 2023-08-12 15:32

Hi

I am not sure if this is your area of expertise but I am purchasing a whole life-based insurance product with a LTC rider known as Asset Care Annuity offered by OneAmerica. This lump sum purchase will be funded by my IRA with qualified money. I have been asked to sign IRS form W-4P. The insurance broker tells me that it is necessary to sign to give OneAmerica instructions not to withhold taxes. Yet I will be paying taxes on the lump sum in 10 annual payments. Does this make sense? I am concerned because w-4P also requires you fill out annual income and other pensions.

Thanks in advance
Heidi Q



Submitted by Alan - IRA critic on Sat, 2023-08-12 18:42

How to you wish to pay your tax liability for all your taxable income including these annuity payments? If you will be paying with estimates or other withholding sources (such as a pension), then decline withholding on this form. However, if you feel you should not decline withholding, you will have to fill out the other info on the form. There is no option to simply request a % to be withheld, other than declining withholding.

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