[GNC] Recommended Method of Entry for IRA Distributions

[Milton Stern]

Hi Everybody,

I must thank you (David T., Michael D Novack, Stan Brown, Richard Losey, if
I missed someone it was unintentional)  for your excellent insights!

I believe that I have my answer of how to enter the transaction and what
account structure I require if I want the transactions to show up in my
income reports.

Concerning the mention of the required withholding. My statement was nor
entirely accurate (complete) for the sake of brevity.

I am under the impression that you now have to submit form W-4R to lower
(or raise) the withholding tax, instead of just stating whatever
withholding that you wish (0%-100%) at the time of distribution request.

Prior to 2023, you could just state, when you make the distribution request
from the financial institution, that you did not want withholding taken.
Now, I believe you have to submit a form (W-4R), based on your income
(estimated tax bracket).
Without this form submission, the default would be 10% for IRAs (I think
20% for 401K / 403b).
With the submission, the withholding would be based on your expected income
/ tax bracket, so that the appropriate withholding will be taken per
distribution, instead requesting whatever withholding you want, and making
up the difference in quarterly estimates.

I hope I am interpreting the info from my brokerage email incorrectly?

Thanks again everyone,

Moshe


On Thu, Jan 12, 2023 at 12:46 PM R Losey <rlosey at gmail.com> wrote:

> I'll try interspersing... using RL>>>
>
>
>
> On Wed, Jan 11, 2023 at 9:52 PM Milton Stern <drmoshe5 at gmail.com> wrote:
>
>> Hi,
>>
>> Please see below ********
>>
>> Moshe
>>
>> On Wed, Jan 11, 2023 at 7:06 PM R Losey <rlosey at gmail.com> wrote:
>>
>>> Hello.
>>>
>>> Assuming you take out $5,000 and they withhold 10% ($500), I would use a
>>> split transaction... sell $5000 worth of the mutual fund, add $4500 to your
>>> bank account, and $500 to federal income tax paid.
>>>
>>
>>> I apologize for not using "debit" and "credit" terms, but I'm not sure
>>> I'd get them right.
>>>
>>
>> ******** Agreed. The component that I am having trouble with is the
>> Pre-Tax IRA Distribution component. Because it is a Pre-Tax IRA, the
>> distribution is taxable as income.
>> ********The direct "sell $5000 worth of the mutual fund, add $4500 to
>> your bank account" direct transaction will not show up in Income Reports.
>>
>
> RL>>> In my brokerage account, I actually "sell" the stock and put it in
> the parent account, using the "IRA income category", and then I do a second
> transfer from the brokerage account to my bank.  Example:
>
> Brokerage account (the parent holding account)
>       Sweep Fund
>       Holding 1
>       Holding 2
>
>
>
>
>>
>>
>>>
>>> You can track them however you wish, but the above is how I would do
>>> them... well, except, I never have the mutual fund withhold taxes; I pay my
>>> own taxes quarterly.
>>>
>>
>> ****** New for 2023. IRS requires the brokerage to withhold taxes from
>> IRA Distributions. Last year you could specify 0% withholding.
>> ****** They don't make it so easy this year. It is sort of a double hit.
>> Even if you get it back as a tax refund, you can't put it back (Rollover)
>> into the IRA to earn tax free.
>>
> RL>>> That's TERRIBLE!  Grrrrr. I wonder what the minimum one can withhold
> is?
>
>
>
>>
>>
>>>
>>>
>>> On Wed, Jan 11, 2023 at 4:35 PM Milton Stern <drmoshe5 at gmail.com> wrote:
>>>
>>>> Hi,
>>>>
>>>> What would be the recommended method of Entry for an IRA Distribution?
>>>>
>>>> The Distribution is for a personal IRA (not Roth).
>>>> The IRA is of Mutual Funds.
>>>>
>>>> The Mutual Fund is in Assets > Investments - Retirement > Brokerage >
>>>> etc.
>>>> > etc.
>>>>
>>>> Since this is taxable income, I need to track withholding (Federal) +
>>>> Net
>>>> Distribution to a Checking Account (Assets > Current Assets).
>>>> No Commission fees are applicable, but it would be nice to know
>>>> where/how
>>>> they would be tracked.
>>>>
>>>> Thank you in advance,
>>>>
>>>> Moshe
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>>>
>>>
>>> --
>>> _________________________________
>>> Richard Losey
>>> rlosey at gmail.com
>>> Micah 6:8
>>>
>>
>
> --
> _________________________________
> Richard Losey
> rlosey at gmail.com
> Micah 6:8
>