Paying taxes once you retire

[JRretires]

I am retiring in January.  I realize that I have to pay my taxes for my income tax for this year in April like I always have.  But do I have to start filing quarterly once I retire in January for my IRA and 401K withdrawals next year?

[DoninGA]

Your 401(k) withdrawals will automatically withhold 20% for federal taxes unless you provide the plan administrator a Form W-4P to change the amount of taxes being withheld.

For your IRA you should provide that plan administrator a W-4P indicating the amount you wish to have withheld when there is a withdrawal.

If done correctly there would be no need for you to pay estimated taxes.

IRS website for a Form W-4P - https://www.irs.gov/forms-pubs/about-form-w-4-p

You can use the TurboTax calculator TaxCaster to get an estimate of the taxes owed for the withdrawals - https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

[marctu]

This is a solid maybe. When you transition from working to drawing on your retirement income, we generally lose our largest source of periodic tax payments.

I would start by using Tax Caster and entering all your income for the year.   I would then suggest withholding taxes on the IRA and the 401(k), though a majority of 401(k) plans withhold taxes, if you see that you are going to be in an owe position.  The form used to accomplish this is the Form W-4P 

Best of luck in your transition @JRretires 

All the best,

Marc T.

TurboTax Live Tax Expert

27 Years of Experience Helping Clients

[JRretires]

Thank you!

[JRretires]

Thank you