How Can We Help?
< Back
You are here:
Print

72t taxes

Posted
Last Updated On
ByRJ

L1: 72t taxesIs your 72t trustee required to hold out income taxes on your 72t withdrawals.2007-07-19 06:42, By: rj, IP: [71.228.234.92]
L2: 72t taxesWhat are you using for distributions, your 401(k) or an IRA?
If it”s your K-plan then I believe you have the 20% mandatory withholding on distributions which are payable to you. If it”s an IRA, then you may choose any withholding from 0% to 100%.
Jim2007-07-19 07:06, By: Jim, IP: [24.252.195.14]

L2: 72t taxesJim,
The 20% withholding is only mandatory for QRP payouts ofELIGIBLE ROLLOVERdistributions, but a 72t payout is not rollover eligible. I know that seems counter intuitive that the a payout that can be rolled has mandatory withholding, but one that cannot and will be taxable does NOT have mandatory withholding.
So the 401k 72t payout can have elective withholding or taxpayer can elect out of it altogether. Electing out might be better since it would avoid possible confusion over the correct payment being gross or net of taxes. There have been a couple posts where this caused a bust from custodian miscommunication. May be better to just pay quarterly estimates.
2007-07-19 12:40, By: Alan S., IP: [24.116.66.98]

Table of Contents