Taking RMD in lump sum at end of year. Can I delay paying taxes until the 4th estimated tax payment and still avoid a late payment penalty?

[VelocityRG]

I turned 73 this year.  I intend to take my rather large RMD as a lump sum mid December.  Can I pay the tax for the RMD in my 4th estimated tax payment or will I incur a late payment penalty for not paying the tax in equal quarterly amounts.  How is this uneven income reported in Turbo Tax.  Thanks for any responses!

[SteamTrain]

There is an Underpayment Penalty area in the Federal forms (on the Other Tax Situations page), where you can delineate which quarter all your income came in, and when each payment was made...that can either eliminate, or minimize any initial underpayment penalty that will likely occur in your situation.  That procedure will create a so called "Annualized" income form 2210/2210AI for the Feds.  Look it up on the IRS website to download it and see what preparing it entails)

But, it's a pain to gather all your income records of exactly when you receive all types of income (including interest , dividends, capital gains...etc), deductions, credits, withholding etc.

It would be better if you could have Federal (and state) withholding done at the time of the distribution, at a level that approximates what your final marginal tax rate will be for 2025...which will take some estimation too.

But check with your provider of those $$ to see if you can specify an ~% level.  Mine will only use a standard 10% Fed & 4% state...and I need 25% Fed & 5% state.

[VelocityRG]

Steam Train,

Thanks so much for your answer!

I did call Fidelity who has my IRA and they did tell me that they can withhold any dollar amount or percentage from 0-99%.  I also read that on a 1099-R that the IRS considers that income distributed and taxes paid to be done equally through out the year.  My RMD is around $130K a year and I don't need the income to live on so I would like to let all the money remain invested until the end of the year.   Also, I do not want to pay underpayment penalties on taxes.  With this information I can figure out how to cover my tax payments and keep the money invested.  Please let me know if you disagree with any of this.

Thanks again!