Re: Estimated tax for 2023--amt to send from RMD--conflicting info
I have been reading commentary from TT community about using RMD's in lieu of estimated taxes and would appreciate your thoughts.
(1) I must be missing something about figuring out the amount to be paid from the RMD. I believe the easiest way is based on a known factor, namely your prior year return, hence pay 100% (or110% if applicable to higher incomes) of the prior year taxes. Am I missing something?
(2) In a prior thread, but the same subject --https://ttlc.intuit.com/community/taxes/discussion/in-general-yes-you-can-apply-all-of-your-rmd-as-tax-wit/01/155342#M64046
there was a reference to using Form 2210, Underpayment of Estimated Taxes. If the RMD is indeed allowed in lieu of estimated taxes, why would one need to complete a Form 2210?
(3) My main question is how to enter the RMD into TT and nowhere have I found a specific answer for that.
- TT provides entry boxes for dates and amounts for 4 estimated tax payments. Do you enter 1/4 of the RMD in each of the 4 boxes, or zeroes in the first 3 boxes and the entire RMD in the last quarter since the RMD will generally be received in December? If the RMD is considered to be “withholding” and not estimated taxes, completing the entries in these 4 boxes would seem to be incorrect.
- Or, if this is indeed "treated as" withholding, the above link mentions Form 1040, line 25d (which is not actually an entry, but the sum of 25 a,b, and c); or Schedule 3, line 10, which is the amount paid with request for extension to file. I question whether there will be a mismatch (by IRS computers) with these entries.
- Or, in TT, under Federal Taxes, Deductions and Credits, Other Income Taxes Paid in (year), there is an item for "withholding not already entered on a W2 or 1099."
- What is the appropriate place for entering into Turbo Tax the RMD distributed to pay for income taxes?
(4) Lastly, like some other commentors, I would like authority for using RMD's in this manner. Again, in the above link, a reference was made to Code section 6654(g), Failure by Individual to Pay Estimated Taxes.
Section (g) reads as follows: (g)Application of section in case of tax withheld on wages
(1)In general. For purposes of applying this section, the amount of the credit allowed under section 31 for the taxable year shall be deemed a payment of estimated tax, and an equal part of such amount shall be deemed paid on each due date for such taxable year, unless the taxpayer establishes the dates on which all amounts were actually withheld, in which case the amounts so withheld shall be deemed payments of estimated tax on the dates on which such amounts were actually withheld.
(2)Separate application. The taxpayer may apply paragraph (1) separately with respect to—
(A) wage withholding, and
(B) all other amounts withheld for which credit is allowed under section 31.
This Code section mentions estimated taxes and withholding, but nowhere does it mention RMD's, nor seem to clearly state, that RMD's are the equivalent of withholding.
Can you or anyone provide a citation/authority which makes this clearer? Thank you for your help.
