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user17611508879
Returning Member

Federal income tax

Do I have to have taxes taken out of my social security, South Dakota state retirement and my traditional IRA ?

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1 Reply
K M W
Employee Tax Expert

Federal income tax

The key to having taxes taken out of your social security, retirement distributions and IRA distributions is not necessarily to have withholdings on EACH of them, but rather to make sure that you have enough withholdings across all of them to cover your tax bill for the year.

 

The IRS does not look at withholdings on an individual income document, rather they look at the overall amounts paid in towards your tax liability for the year.   If you don't pay enough in during the year, you may be subject to an underpayment penalty.  However, whether you have withholdings on just one or multiple income sources doesn't matter - as long as you have enough at the end of the day.

 

So, no, you do not have to take taxes out of all three items - just make sure that if you choose to only have taxes taken out of one or two of them, that you are comfortable the amount taken out is enough to cover the tax liability on all your income for the year.

 

TurboTax has some great tax calculators to help you estimate your taxes based on your income.  You can visit TurboTax Tax Calculators to find out how much you'll get back this year (or how much you’ll owe), and then use that information to adjust your withholdings on as needed.

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