topic Withholding for Inherited IRA RMD in Get your taxes done using TurboTax

Withholding for Inherited IRA RMD

glerbnik84 — Fri, 22 Nov 2024 21:29:15 GMT

I took the RMD from my inherited IRA account for the 2024 tax year. I was uncertain which withholding percentage I should choose for Federal tax. I opted for the percentage equating to my tax bracket for the 2023 tax year. My 2024 income will place me in a higher tax bracket.

If my withholding from all income sources for 2024 exceeds my 2023 tax liability, am I correct in assuming that I will not be subject to a penalty for having chosen a withholding percentage for the RMD that is less than my 2024 tax bracket?

Thanks in advance for your insights!

Re: Withholding for Inherited IRA RMD

Bsch4477 — Sat, 23 Nov 2024 00:30:03 GMT

Correct.

Re: Withholding for Inherited IRA RMD

dmertz — Sat, 23 Nov 2024 00:52:56 GMT

If your 2023 AGI was more than $150,000 ($75,000 if married and filed separately), it will need to be at least 110% of your 2023 tax liability to qualify for this safe harbor, otherwise tax withholding of at least 100% of 2023 tax liability is sufficient.

You might also what to check state tax withholding to see if it's sufficient.

Re: Withholding for Inherited IRA RMD

glerbnik84 — Sat, 23 Nov 2024 17:46:39 GMT

Thank you!

Re: Withholding for Inherited IRA RMD

glerbnik84 — Sat, 23 Nov 2024 17:49:14 GMT

Thank you for your reply, and for your advice about checking on the state income tax!