Tax question

L1: Tax questionI’ll be starting aSEPP next year. Can I ellect to have my IRA custodian withhold taxes for me, or will that bust the plan? I know that the SEPP distribution needs to be to the penny, but if I choose quarterly distributions, just wondering abouta tax withholding of 15% on the distribution. Thanks for the good advice.2012-08-20 03:52, By: JH, IP: [71.50.74.144]
L2: Tax questionThe GROSS DISTRIBUTION is the figure that must be calculated from the formula, and must be the same each year (except for the allowable proration in the 1st and last years), not the net after the federal income tax withheld.
I prefer having clients pay estimates, rather than trusting the custodian to make them. However, some clients are concerned that they would not be disciplined enough to not spend the “tax money”.
Also, if you are subject to state or local income taxes on these distributions (in PA we are not, usually), you might want the federal deduction for those 4Q estimated payments a year earlier by making them yourself, because the custodians would not remit the 4Q estimates until January of the following year.2012-08-20 15:48, By: dlzallestaxes, IP: [173.62.190.86]