How can you pay required min fed & state tax for: RMD, normal distribution, securities in kind to distribute to non retirement acct? How to pay "outside" the ira?

[lisa1aguilar]

Is there a irs form to pay at the time of distribution but the funds coming from another account other than the IRA? There is no cash in the ira and I don't want to sell something to pay the tax. Maybe there is an irs form I can use and attach a check or money order to pay the tax today for the rmd due by 12/31 again, with the tax funds coming from outside of the IRA itself to not be penalized?

[DoninGA]

You can request the plan administrator withhold federal and state taxes when the RMD is distributed.

Use IRS Form W-4P and send it to the administrator - https://www.irs.gov/pub/irs-pdf/fw4p.pdf

For the state tax withholding you should ask the plan administrator what state form is required.

Or you can make a federal 2023 estimated tax payment using the IRS payment website - https://www.irs.gov/payments

Go to your state tax authority website for how to make a state estimated tax payment for 2023.

[dmertz · Accepted solution]

If there is no cash distributed, there can be no tax withholding.

Quarterly estimated tax payments can be made by check using IRS Form 1040-ES or you can use IRS Direct Pay:

https://www.irs.gov/payments/direct-pay

Except for possible transaction fees and changes in share value during the process, distributing shares in-kind is generally no different that selling the shares in the IRA, distributing the cash and using cash to repurchase the shares outside the IRA.  This would allow for tax withholding and substituting other funds to make the repurchase, potentially a better alternative than making an estimated tax payment due to the difference in the way that withholding and estimated payments are allocated by tax quarter.

[lisa1aguilar]

I appreciate the response and I do understand what you are saying but I don't think you understood me.

I don't want the administrator to "withhold" if I do that I am saying to take the tax from the ira and my question is exactly opposite that of how do you pay outside the ira.

Like can I just send a check from my checking account. I am trying to pay the taxes outside the account as to not be penalized. 

There are no funds within the account. There are only securities that I do not want to sell in order to "withhold" 

Any other idea?... 

Thank you 

[lisa1aguilar]

Thank you. 

That is what I will do.

Pay estimated taxes.

I pay estimated taxes the past 5 years. I just assumed that the tax needs to be labeled for the RMD specifically or specifically from the IRA account itself or be penalized. But I think maybe I may be "over thinking" this issue.

The estimated tax I pay now would cover anything due from the RMD, fed and state, so ya, unless you correct me, I have been over thinking this and driving myself a little nutty...

I appreciate the quick response...

Thank you again!