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Can I withhold my fed prepayment tax amount from my RMD in December to avoid making costly prepayments throughout the year?

I read the withholding is considered evenly throughout the year even if one distribution. This is important as I have rental income and social security also.

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Rachel_W
Expert Alumni

Can I withhold my fed prepayment tax amount from my RMD in December to avoid making costly prepayments throughout the year?

You are correct, any tax withholding is considered paid evenly throughout the year.  So yes, it is perfectly acceptable to have taxes withheld from your RMD in December to cover your taxes for the year.  This is assuming your RMD is large enough to cover your tax liability.

I would recommend double checking with the Financial Institution to make sure they don't impose their own limit on withholding. 

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1 Reply
Rachel_W
Expert Alumni

Can I withhold my fed prepayment tax amount from my RMD in December to avoid making costly prepayments throughout the year?

You are correct, any tax withholding is considered paid evenly throughout the year.  So yes, it is perfectly acceptable to have taxes withheld from your RMD in December to cover your taxes for the year.  This is assuming your RMD is large enough to cover your tax liability.

I would recommend double checking with the Financial Institution to make sure they don't impose their own limit on withholding. 

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