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I have a question that has probably beeen asked before. I know that taxes are paid on withdrawals in the year of withdrawal and the amount in accordance to you income. Is the tax withheld by the provider or is it estimated by the person receiving the monies?
Walter
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No. of Recommendations: 0
I have a question that has probably beeen asked before. I know that taxes are paid on withdrawals in the year of withdrawal and the amount in accordance to you income. Is the tax withheld by the provider or is it estimated by the person receiving the monies?
Walter


Usualy your choice unless you are closing the account. Then at least 20% is withheld.

But you maybe subject to quarterly estimated tax payments so if the money is not withheld you will have to pay the tax each quarter.
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I know that taxes are paid on withdrawals in the year of withdrawal and the amount in accordance to you income. Is the tax withheld by the provider or is it estimated by the person receiving the monies?

Withholding of 20% for Federal tax is mandatory. You can request more, but not less. See Publication 575.

If the withholding isn't enough, you may also need to make estimated tax payments. See Publication 505.

Phil Marti
VITA Volunteer
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