suemarkp wrote: Fri Oct 24, 2025 2:51 pm
Estimated taxes are a pain. You need to pay them evenly or suffer with doing an form 2210-AI to show the IRA your paid them when due. […] Withholding is always considered timely, unlike estimated tax payments.
(Different poster here, following this thread.)
Even if I’ve overpaid in one of the quarters, to the extent I created a net refund for the year? Ugh.
It’s not the form I’m afraid of, it’s whatever penalties they might inflict for having overpaid in one quarter and thus not making a payment the next quarter. (I guess I could go in and make a $1 payment in successive quarters?)
suemarkp wrote: Fri Oct 24, 2025 4:44 pm
As far as the rest, it can be difficult for a retiree to manage tax payments, especially if you have income or realized gains from a taxable account that varies. You can try to minimize that by keeping dividends to a minimum in taxable and put the tax generating stuff in an IRA. IRA distributions are going to need some level of withholding, and you will always need to figure out what level is necessary. When RMDs hit, this will be even worse.[…]
For your original question, it seems like you are way over on withholding and/or estimated tax payments for this year. So you can probably stop. But best not to guess and do a mock tax return to make sure you are sufficient.
I didn’t see it mentioned, but I wonder if OP would benefit from reviewing the Tax Estimation Tools?
It’s ok. Taxes are complicated, really really complicated, like others have said. And they are constantly changing and evolving – sometimes even during the filing period. That’s why the Tax Estimation Tools are there. (I didn’t see it mentioned whether you already use an estimation tool.)
Also because I’m not sure the regular tax prep software companies have much in the way of forward-looking or tax estimation/planning tools.
When I early-retired in mid-May, I knew I’d have to make estimated payments, and that the next would be due in June. But I either used (I can’t quite remember) a hackneyed thumb-in-the-wind approach, or I tried to use TurboTax 2024 to enter a mock return, to estimate my taxes for the 2025. The hardest / most complicated part for me was figuring out what to enter into the W-2 fields, as I only had my final paycheck to go on.
Since then I started trying out some of the tools until I settled on Excel1040.com (it also works in Google Sheets and other “freeware”). There are many others, with varying levels of difficulty, complexity, and accuracy. I’m very Excel-savvy, and that provided the level of granularity and detail that I wanted. I added my own formulae in various forms to project future income for the year like qualified dividends, capital gains, etc., for the whole year, and the tax effect certain moves / decisions would have. (I also found and use a spreadsheet to estimate future dividends for each of my funds that pay them; I feed this info into the 1099-DIV.) It even helped me to optimize my income and investments to reduce taxable income, such as by reducing ordinary dividends. I even added formulas to estimate my state taxes.
Eventually I found from using these tools that that estimated payment I made in June, didn’t need to be made as I was already covered by my W-2 withholdings. (Actually I would have had a refund for TY 2025 even without that estimated payment.)
If you’re not so spreadsheet-savvy you may find it’s not for you. But try different ones, maybe from “easiest” to “hardest” (I don’t remember which are the “easiest”).
OnTrack2020 wrote: Fri Oct 24, 2025 4:46 pmI paid the 22% directly through the IRA distribution (had it withheld).
So I may be the voice of dissent here with the other responders, and in full disclosure I’m not taking IRA distributions yet (as I’m under 59.5), so I can’t speak from personal experience on that. But I’ve heard CFP’s and others recommend not to have the taxes on IRA distributions withheld. Unless you really don’t trust yourself to make the estimated payments in a timely manner, or to “correctly estimate” them (either over or under estimating by a huge amount), better to make estimated payments using funds from your bank account or taxable account.
The reason is because if withholding, the withholding will be taken from your IRA, on top of the amount you choose (or your brokerage chooses, if an RMD) to have distributed. This means that extra amount withheld no longer is able to achieve growth and/or dividends. Basically sort of slightly hurting your future self.
OnTrack2020 wrote: Fri Oct 24, 2025 4:46 pmI think I need to have our CPA figure this out. What a pain.
I personally worry about becoming far too dependent on even a professional, in any field (except maybe medicine?), to “figure this out”, with little to no basis for discussion or comparison. (I have trust issues. ) I’m not saying don’t go see your CPA, or to drop them altogether. But I’d suggest taking a look at the Estimating Taxes article and the tax Estimation Tools list, before you go to your CPA, to see if there’s one (or two, or three, that agree closely with each other) you’re comfortable with. Use that to the best of your ability with the best available information you have as input, and take that output with you to your CPA. Better to have a discussion with them rather than a dictation from them. Even if your estimate(s) and theirs are significantly off, you could have a discussion about what might have led to that discrepancy, so you’ll have advice on how to better estimate in the future.
I’m reminded of Jeff Spicoli from Fast Times at Ridgemont High: “I can fix it. My old man is a television repairman. He’s got the ultimate set of tools. I can fit it.”
Regards,
-Raj
