When I was a W-2 employee, there was a nice rule that said that ALL money withheld from my wages were considered to be evenly withheld throughout the year, regardless of when they were actually withheld. For example, if forseeing a big underpayment penalty, one could dramatically increase one's withholding for the last few pay periods. I'm wondering if the same rule applies to withholding on
1099s - the 1099-R (for annuties and pensions) in particular ? Thanks, John
Yes. All withholding from all sources is treated the same. It's spread evenly through the year unless you elect on Form
2210 to have it applied as withheld. See IRS Publication 505.-- Phil Marti Clarksburg, MD
Considering withholding as evenly withheld throughout the year is the default setting. Optional is proving that it was not. Thus if you got a large IRA withdrawal in March, it might behoove you to use actual withholding per quarter instead of the optional default method. ChEAr$, Harlan Lunsford, EA n LA
Yes.
-Mark Bole
Rule or not, the IRS does not have a way of determining how withholding is achieved throughout the year. Only the total is reported.
Withholding is withholding, no matter what tax form it is reported on. It all goes on the same line of your 1040 form.
Yes John ALL withholding may be treated as averaged or in the specific period it was withheld, Many seniors with RMDs don't pay installments but have their RMD agent withhold enough tax to either meet the last year's tax safe harbor, or the 90% of current year's tax safe harbor. This has a lot of advantages of Leaving money in the IRA for the longest time, paying the taxes in December out of funds drawn in December, no installment concerns or form 2210 or penalties. Be sure yur IRA Aagent is willing, can you just tell them verbally or must they have something in writing. How much leadtime because it must be withheld in December or earlier. etc. ede
Generally, withholding is deemed as paid evenly throughout the year.
I'm not sure a pension or annuity plan will be as willing to adjust withholding, as they may be on more of a set % of withholding than a table as a W2 employer is. ___________________________________
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