First RMD to be taken in 2024, how much tax to withhold

[shatfield]

I turned 73 on 3/27/2024 and will have to take my first RMD from my 401K in 2024. Is there a ballpark percentage of federal tax to be withheld from this distribution? 

[xmasbaby0]

We have no access to any of your other information.  We do not know if you will be receiving Social Security, continue to work, receive investment income, rental income, etc etc. etc.   

[fanfare]

Withholding rate  depends on your 

• current tax bracket
• new tax bracket depending on the size of your distribution.

The first step is to visit 401k website to see the RMD amount calculated there for you.

You can take the distribution now and

• get current money market rates
• invest it in self-directed brokerage account.

@shatfield 

[shatfield]

Thanks for your reply. My wife and I are retired, receiving Social Security, both have small pensions from work, some interest income, no large investments or rental income. Our 2023 AGI was less than $20,000 and effective tax rate was 0. The RMD for 2024 is $22,620 and I'm waiting toward the end of the year to take it. Does that help with being able to make a guess of how much federal tax should be withheld? Thanks

[ThomasM125 · Accepted solution]

I suggest you go back into your tax form in TurboTax where you will find an estimated tax routine you can go through to determine what estimated taxes you may need to pay next year. You will have an opportunity to enter your additional income and TurboTax will tell you what estimated tax you should pay in to reduce the possibility of owing money next year when your taxes are due. Use the estimated tax due as the amount to withhold from your RMD. You will see that routine in the Other Tax Situations menu tab, then look for Other Tax Forms, then Form W-4 and Estimated Taxes.  You may need to say you need to enter a state tax return to get back into your TurboTax program.