Personal Finance (Not Investing) • Re: RMD Tax Withholding

• If the required annual payment is met by withholding plus 4 equal estimated payments, the withholding is all timely.

Well done. In order to avoid the inevitable question when we use this phrase it might be best to clarify that 4 equal estimated payments also includes none being made.

I agree.

I don't like "timely" at all. It's too vague.

I strongly agree. You can read in this thread how I struggled to pin it down to a precise and sensible definition for this usage. It's not that withholding is "timely" in the usual sense of being on time, it's that the timing does not matter. Subtly different.

I also prefer referring to "required annual payment" (the language used by the IRS on Form 2210) rather than "safe harbor" in what is supposed to be a standalone statement, so as not to invite a deeper exploration of "safe harbor" before the simple statement can be understood. I'm not sure everyone here would agree with that, but so it goes.

Putting it all together, and throwing the "concise enough for a bumper sticker" requirement out the car window:

• If the required annual payment is met by withholding, or by 4 equal estimated payments, or by a combination of both, the timing of any estimated payments matters but the timing of the withholding does not.

Statistics: Posted by ssel — Mon Jan 20, 2025 3:53 pm

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