IRA WITHHOLDING
I am due for RMD in 2022 what is minimum withholding tax for either monthly or total expected distribution so that percentage do not trigger IRS penalty.
I am due for RMD in 2022 what is minimum withholding tax for either monthly or total expected distribution so that percentage do not trigger IRS penalty.
Permalink Submitted by Alan - IRA critic on Tue, 2022-01-11 16:13
The minimum withholding is 0, but if you want to withhold enough to avoid an underpayment penalty, you must meet one of the safe harbor amounts, one based on 2021 tax liability (100%, but 110% for 2021 taxable income over 150k) and the other based on 90% of 2022 tax liability. You won’t know the latter figure until you can work up your 2022 tax return. Most people use the prior year figures because they are known, unless your current year tax 2022 tax liability will be way down from 2021. That probably does not apply in your case, since you will have an RMD for 2022 that you did not have in 2021.
Permalink Submitted by gautam SHAH on Tue, 2022-01-11 21:13
Thank you. i am in highest tax bracket. I am resident of indiana and moving to florida in MAY2022. i am trying to limit my income to pension and social security for first 6 months. I WILL TAKE MY RMD once i am resident of FLORIDA my other income does not come till end of year distribution from real estate parnership so can i withhold for income i take or use 110 percent previous year and divide quarterly?