You'll need to sign in or create an account to connect with an expert.
Do you mean like say you want to withdraw 10,000 from your IRA. So should you take the 10,000 out without tax withholding and pay the tax from other money? Or actually take out 12,000 and have 2,000 held out for the tax to net 10,000? If you don't have taxes deducted from the withdrawal then it will still grow tax deferred.
That's your choice unless they take a mandatory percentage out.
If you have taxable income, what other option do you think you might have other than paying taxes?
Or are you asking when to pay the taxes?
The income tax system is pay-as-you-go. If you have income during the year you are expected to pay tax during the year, by making estimated payments or through withholding. If not, you will be assessed a late payment penalty, even if you pay in full when you file your return.
If you are making lump sum withdrawals that you know will be taxable, you should either have some withholding or make estimated payments at the IRS web site. If you over-withhold or over-pay the estimates, you will get the excess back as a refund when you file your return.
thanks for your reply. What I was getting at is this: If I take a withdrawal from my IRA, I was thinking of paying the taxes owed on that IRA money with money from a taxable account.
@JMNB wrote:
thanks for your reply. What I was getting at is this: If I take a withdrawal from my IRA, I was thinking of paying the taxes owed on that IRA money with money from a taxable account.
Once you withdraw money from any account, it's just money and it doesn't matter where it came from.
If you withdraw from a traditional IRA, you will owe income tax. You can pay that income tax by withholding from the IRA distribution, or by writing a check (or electronic deposit) from any other money you have handy. Where the tax payment comes from doesn't change your tax on the distribution.
Do you mean like say you want to withdraw 10,000 from your IRA. So should you take the 10,000 out without tax withholding and pay the tax from other money? Or actually take out 12,000 and have 2,000 held out for the tax to net 10,000? If you don't have taxes deducted from the withdrawal then it will still grow tax deferred.
That's your choice unless they take a mandatory percentage out.
yes, that is what I am proposing. I think it would be wise to leave as much as possible in the tax-deferred account and pay the taxes from another account (taxable account). thanks.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
tah0476
Returning Member
elselko
Level 1
GiovannaM
New Member
Questionasker
Level 4
Jm931
Level 1
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.