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New Member
posted Feb 5, 2024 7:21:51 AM

how to calculate tax estimates for retirement income

Entering taxes withheld for pensions in calculating tax estimates should be a separate category, as they are not WAGES. Can TT fix this?

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3 Replies
Expert Alumni
Feb 5, 2024 9:22:47 AM

This is not likely to change at least in the near term.  However TurboTax is constantly looking for ways to improve its products and change in this area may occur in the future.  For now, in TurboTax using the "W4 and Estimated taxes" topic, pension and annuity distribution income is netted in the "Other income" category.  However, the 1099-R withholding is not automatically accounted for and must be entered. 

 

According to the IRS for withholding purposes pension and annuity distributions are treated as wages.  Here is an IRS link for more information.

 

When figuring estimated taxes for the following tax year, in the page titled "Enter your 2024 W-2 Wage Information" you should add any expected 1099-R withholding to one of the expected withholding boxes.  You could adjust the other income box later in the interview, if applicable, for any  expected 1099-R distribution changes.

Level 1
Feb 28, 2024 11:25:15 AM

the last answer in the string makes sense and in the Wage Income section of the Estimated Taxes and Form W-4 Worksheet I can add the expected 2024 Wages and 2024 Withholdings.  The worksheet calculations do not pick up the anticipated 2024 Withholdings and this seems like it would cause the Estimated Tax calculation to be too high.  Is there a way to manipulate this in the worksheet?

Expert Alumni
Mar 7, 2024 6:59:23 AM

 It should be there if you entered this correctly. The screenshot I have included below shows an example of a ES & W4 Wks and the 2024 withholding estimate is there under Wage Income.