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I guess I don't understand how this changes anything except that I don't have to deposit part of the distribution check in the bank. Won't the same taxable amount of my distribution get to the government either way?

Unlike quarterly tax payments, withholding is treated as if it is sent to the IRS evenly throughout the year. So you could delay your RMD until Dec, 2011 and, assuming that the RMD is at least the amount of the safe harbor payment that you need to send to the IRS to avoid penalties for underpayment, you could have the entire amount withheld from the RMD and not have to make quarterly payments at all. Here's an article from Fairmark that has some additional details:

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