I'm retiring with no job. I will receive a federal pension + OPM annuity supplement + TSP withdrawal. All taxable. Wife will continue working. This statement on 2(b)(ii) on the IRS form is very confusing.
Do i?
1. Enter wife's annual salary in 2(b)(i)?
2. Enter My retirement (pension+annuity+TSP) in 2(b)(ii) /* This is higher than wife's salary
3. Then add both lines 2(b)(i) and (ii).
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I haven't had to fill out a Form W-4P before, particularly the new one that the IRS created for 2022 and beyond. That said, I agree with your #1 but disagree with #2. As I read it, 2(b)(ii) is only to include the total of pensions and annuities that pay less than the one for which you are preparing this Form W-4P and you wife's salary has no influence on the amount that goes on 2(b)(ii). 2(b)(ii) should not include the amount being paid from the pension or annuity for which you are preparing the Form W-4P. The Form W-4P that your provide to each pension and annuity provider will be different on 2(b)(ii).
It's not clear to me whether or not the TSP should be included on 2(b)(ii) if you are not receiving distributions from the TSP in the form of an annuity. The instruction for 2(b)(ii) does not specify that it is to include only the lower paying pensions and annuities that are paying periodic benefits, so it seems that the TSP would need to be included on 2(b)(ii) of the Form W-4P for higher-paying pensions and annuities that are paying periodic benefits. On the other hand, because distributions from the TSP that are not in the form of an annuity can vary, the amount that you would include would be effectively unknown.
If the TSP is not paying distributions in the form of an annuity, I would expect that you would need to provide the TSP with Form W-4R instead of Form W-4P. Form W-4R is used to specify a withholding different from the default 10% or greater than the 20% mandatory withholding depending on the nature of the nonperiod distribution.
I haven't had to fill out a Form W-4P before, particularly the new one that the IRS created for 2022 and beyond. That said, I agree with your #1 but disagree with #2. As I read it, 2(b)(ii) is only to include the total of pensions and annuities that pay less than the one for which you are preparing this Form W-4P and you wife's salary has no influence on the amount that goes on 2(b)(ii). 2(b)(ii) should not include the amount being paid from the pension or annuity for which you are preparing the Form W-4P. The Form W-4P that your provide to each pension and annuity provider will be different on 2(b)(ii).
It's not clear to me whether or not the TSP should be included on 2(b)(ii) if you are not receiving distributions from the TSP in the form of an annuity. The instruction for 2(b)(ii) does not specify that it is to include only the lower paying pensions and annuities that are paying periodic benefits, so it seems that the TSP would need to be included on 2(b)(ii) of the Form W-4P for higher-paying pensions and annuities that are paying periodic benefits. On the other hand, because distributions from the TSP that are not in the form of an annuity can vary, the amount that you would include would be effectively unknown.
If the TSP is not paying distributions in the form of an annuity, I would expect that you would need to provide the TSP with Form W-4R instead of Form W-4P. Form W-4R is used to specify a withholding different from the default 10% or greater than the 20% mandatory withholding depending on the nature of the nonperiod distribution.
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