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Making one end-of-year estimated tax payment...

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astroboyFA

New member
If I take a single annual distribution from my IRA in, say, mid-December, and I have the appropriate FIT withheld at that time, can I be penalized for not making quarterly payments?
 


adjusterjack

Senior Member
Whether or not you have a penalty for under withholding depends on how big a check you have to write to the IRS above what's been withheld throughout the year.

All I can suggest is that you study up on the IRS estimated tax publications.

Just google IRS Estimated Tax and a bunch of reference material will come up.
 

FlyingRon

Senior Member
Note that some states are less forgiving than the FEDS. If you have a single LUMP sum (and no previous tax liabilty), the IRS will look the other way on the lopsided estimated payment. Other states will not (notably Virginia). They don't care if it was an unforseen windfall that shows up on Dec 31, they wanted you to make equal payments all year.
 

astroboyFA

New member
Thanks, Ron. I live in Nevada; no state income tax. otoh, I do get Social Security checks every month, some of which would end up being taxable. Still, assuming I had enough withheld to cover the IRA distribution, my underpayment would be less than $1,000...
 

adjusterjack

Senior Member
Thanks, Ron. I live in Nevada; no state income tax. otoh, I do get Social Security checks every month, some of which would end up being taxable. Still, assuming I had enough withheld to cover the IRA distribution, my underpayment would be less than $1,000...
In that case you needn't be concerned about estimated tax. I have the same situation. I take about $20K per year from my IRA without withholding anything. Added to about $20K per year SS and my fed tax was less than $1000 for 2018 with no penalty.
 

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