topic Retirement in Get your taxes done using TurboTax

Retirement

BHall87 — Tue, 24 Feb 2026 06:25:36 GMT

My husband and I are both retiring in the third quarter of this year. We have to fill out a W4 for our retirement income. How do we know what to put on the form if we want the smallest amount of taxes taken out without having to pay a penalty at tax time? We don't mind paying some taxes when filing, but don't want to pay a penalty.

Re: Retirement

JBedford — Wed, 24 May 2023 17:15:08 GMT

Hi, @BHall87 , great question! So, the first thing to determine is the minimum amount you must pay in withholding to avoid a penalty. The IRS offers a couple of ways to determine this. According to the IRS:

"You may avoid the Underpayment of Estimated Tax by Individuals Penalty if:

Your filed tax return shows you owe less than $1,000 or
You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less."

Additionally, our free W-4 Calculator might be helpful as a starting point in your calculations. Please let me know if this is helpful!

Re: Retirement

BHall87 — Wed, 24 May 2023 17:42:16 GMT

Thank you, that does help. Can you also tell me what effect raising or lowering the amount of other income put on line 4(a) has on my withholding amount?

Re: Retirement

JBedford — Wed, 24 May 2023 17:43:50 GMT

Yes! Raising that amount will increase your withholding, and lowering it will decrease it.