Determine Pension Withholding using Form W-4P

Forum|Forum|4 years ago
March 26, 2022
13 replies
152 views

I'm 73, retired, and married, filing jointly. We have combined income from NO JOBS. Taxable income comes from 1) Pension, 2) Annuity, 3) Social Security, and 4) IRA Required Minimum Distributions. I'm trying to figure if I need to make periodic payments next year and/or apply this year's rebate to next year taxes. None of the instructions for Form W-4P include that scenario. I'm unclear on Form W-4P Step 2b (i and ii).

If I have NO JOB, do I consider the income from the highest source as the "job" income not to include in Step 2b(ii)?

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Best answer by ErnieS0

Your pension, annuity, required minimum distributions and possibly part of your Social Security are taxable.

You can have income tax withheld from all of those sources of income or you can make periodic payments.

Enter your taxable Social Security on Form W-4P Step 2(b)(i) from Form 1040 line 6b.

On Step 2(b)(ii) enter the total amount of pension/annuity income from all other pensions and annuities except the one you are filing Form W-4P for. That will be the total of Form 1040 lines 4b and 5b minus the pension your are working on.

ErnieS0Answer

Level 15

Your pension, annuity, required minimum distributions and possibly part of your Social Security are taxable.

You can have income tax withheld from all of those sources of income or you can make periodic payments.

Enter your taxable Social Security on Form W-4P Step 2(b)(i) from Form 1040 line 6b.

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rickcloAuthor

Level 2

The answer from @ErnieS0 was sooo good, it made clear to me that I was using the wrong form, altogether! How often does THAT happen? Ha ha. Instead of using Form W-4P, I really needed Form 1040-ES. Thank you, @ErnieS0.

ktport

Level 2

If you leave Form W-4P Step 2 and Step 3 blank, the federal withholding will be $437.30 (as of around 4-1-2023). Then, if you need more withheld, enter the additional amount in Step 4(c).

TAH2

Level 2

ktport,

Thanks, this is what I ended up doing. Seems crazy that you basically have to ignore the form fields and just fill in how much you want withheld, but that's the solution.

TAH2