Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
largeinsb
New Member

Hello I recently purchased a house and used a distribution from my IRA to do it. I am not retirement age. I would like to do tax planning and start making tax payments?

 
4 Replies
Critter-3
Level 15

Hello I recently purchased a house and used a distribution from my IRA to do it. I am not retirement age. I would like to do tax planning and start making tax payments?

If you had nothing withheld from the distribution then you can safely send the IRS 20% of the distribution  +  a 10% penalty on the distribution above the first $10K if you are eligible for the first time homebuyer exclusion of the penalty otherwise  just send in 30%.

VolvoGirl
Level 15

Hello I recently purchased a house and used a distribution from my IRA to do it. I am not retirement age. I would like to do tax planning and start making tax payments?

If you want to send in an estimated payment, 

Here are the 1040ES instructions and blank forms (where to mail is on page 4)
https://www.irs.gov/pub/irs-pdf/f1040es.pdf


Or you can pay on the IRS website. Be sure to pick 2022 1040ES payment
https://www.irs.gov/payments

 

SweetieJean
Level 15

Hello I recently purchased a house and used a distribution from my IRA to do it. I am not retirement age. I would like to do tax planning and start making tax payments?

Remember state taxes as well. 

As you can see, this is an expensive way to buy a home.

Hal_Al
Level 15

Hello I recently purchased a house and used a distribution from my IRA to do it. I am not retirement age. I would like to do tax planning and start making tax payments?

The distribution will be taxed at your marginal tax rate, probably 12%.  Anything over $10,000 will also be subject to the 10% penalty.

 

It is not necessary to send in estimated payments. Most people can wait and pay at tax time. You should make estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits. 
- 2. You expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your current year’s tax return, or  100% of the tax shown on your prior year’s tax return. (110% if your income was more than $150K) .

 

If your goal is just to avoid the underpayment penalty, then paying 100% of the prior year tax liability is the “safe haven”

Dynamic AdsDynamic Ads
Privacy Settings
v