I am planning to retire this year and hoping for some guidance on completing w4p as it is confusing to me. I’m worried of possible penalties this first year due to the changes and not having enough taxes withheld. I’ve read the info on irs website for completing the w4p but that didn’t help 🙂 Thank you!
What are your specific questions about completing the form? Do you have a lot of pensions or only one?
I have more than one pension, SS and part of the year with one job. The step 2 & 4 sections are confusing as I’m not sure if I add the other pensions in on every w4p that I complete. Step 4 is optional for other income and deductions but not sure what to add there as so much is changing.
Prepare a W-4 Employee's Withholding Certificate for your W-2 income and one for each of your pension distributions. You may have to contact each pension provider to obtain their form.
If you prepare a withholding for each of your pension distributions, you will feel more comfortable that you have covered the major components of your income.
Then in Step 4 (a) Other Income, you can concentrate on interest, dividends, stock sales and the taxable portion of your Social Security benefits.