James48843
Well-known member
(This past year I didn’t follow exactly how much I had withdrawn over the year- and I ended up having to pay the IRS about $6 k this spring. Here is a story to talk about withholding more for taxes upon disbursement. It’s from govexec.com and it’s a good article about keeping track of how much you have had withheld, and adjusting as necessary so that you don’t get a big surprise.)
The federal retiree's guide to tax withholding
While tax withholding is automatic while working, retirees face the responsibility of ensuring their income is withheld for federal and state taxes. With that in mind, here are some options to be aware of.
(Snip)Understand the shift from “autopilot” to “manual” withholding
While employed, taxes are automatically withheld from your paycheck, and you don't have to think much about it. However, upon retirement, federal employees must shift from autopilot to manual control, taking responsibility for tax withholding themselves. This new obligation can be daunting due to its impact across multiple income streams, including your FERS pension, TSP withdrawals and potentially Social Security benefits. Making informed decisions about withholding can help you avoid unexpected tax bills, penalties for underpayment or unnecessarily large withholdings that reduce your monthly income.
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Don’t get stuck with a tax bill in retirement: The federal retiree's guide to tax withholding
While tax withholding is automatic while working, retirees face the responsibility of ensuring their income is withheld for federal and state taxes. With that in mind, here are some options to be aware of.
www.govexec.com
