On Wed, 15 Sep 2021 13:17:35 EDT, ira smilovitz wrote:
On Wednesday, September 15, 2021 at 10:58:15 AM UTC-4, Rick wrote:
Is there a maximum amount a person can specify for tax withholding on an IRA
distribution? For example, if a retired taxpayer (over-65) has under-withheld during the year on IRA distribution and doesn't want to file quarterly or estimated taxes or pay an IRS penalty, can he withdraw a specific amount from an IRA savings account in December and specify 100% withholding for taxes? Assume it's the kind of savings account where money can be withdrawn at any time.
Legally, the most you can withhold for taxes is 100% of the distribution. It's possible that some custodians have a lower maximum.
One data point: Vanguard will withhold 0, 10%, or any higher amount
that you specify. Apparently you can't have them withhold anything
between 0 and 10%.
https://personal.vanguard.com/pdf/s273.pdf?2210114361
But don't forget: there's state withholding too, so you probably
can't apply 100% of the distribution to Federal withholding. Some
states don't allow you to opt out of state withholding if you're
having Federal tax withheld. This table is about a year old, but will
give you an idea:
https://personal.vanguard.com/pdf/sarpsc.pdf
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