Good question! I would start by checking with your financial institution first. The majority of IRAs automatically apply a 10% withholding on RMDs. So before you elect to withhold more, I would see what your current withholding elections are.
After that, I would check your prior year tax liability and use that as a ballpark, or try one of Keeper Tax’s income tax calculator to figure out what your estimated liability might be.
If you regularly give to charity, I also recommend routing your charitable contributions through your IRA. This will reduce your taxable income and often lead to greater tax savings than deducting your charity on your itemized deductions.
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Sarah is a staff writer at Keeper Tax and has her Enrolled Agent license with the IRS. Her work has been featured in Business Insider, Money Under 30, Best Life, GOBankingRates, and Shopify. She has nearly a decade of public accounting experience, and has worked with clients in a wide range of industries, including oil and gas, manufacturing, real estate, wholesale and retail, finance, and ecommerce. Sarah has extensive experience offering strategic tax planning at the state and federal level. During her time in industry, she handled tax returns for C Corps, S corps, partnerships, nonprofits, and sole proprietorships. Sarah is a member of the National Association of Enrolled Agents (NAEA) and maintains her continuing education requirements by completing over 30 hours of tax training every year. In her spare time, she is a devoted cat mom and enjoys hiking, baking, and overwatering her houseplants.