Easy Seniors Club presents you: rules for tax withholding on distributions from retirement plans
When you have a job and you work every day, managing your tax withholding doesn’t give you that much trouble. Your much-needed paycheck is more likely your main source of income, and once you’ve submitted your W-4, you may not think that much about the dollars you set aside for your taxes—of course, as long as it’s enough to take care of that tax bill.
But things change once you retire, and tax planning and then tax withholding turn into a very complicated job. When you’re in your beautiful golden age, your income will likely be drawn from several sources, and each one of them might have different tax withholding rules that you need to be aware of, as tax experts say.
If you want to know more about this, you’re at the right place! But before we begin, we have to say a couple of things about how federal tax withholding normally works for some general sources of retirement income (state withholding can also apply here).
First things first, the distributions of funds from a particular retirement plan are subject to withholding for federal and state income tax. However, the amount at which federal income tax is withheld is influenced by two important factors, such as the recurrence of the distributions and the type of retirement plan you have, like an individual retirement account (IRA), pension, 401(k), or annuity.
So if you want to learn more about rules for tax withholding on distributions from retirement plans, click on the next page: