Federal Tax Extension ?

[joey2665]

Originally Posted by thinkxingu

I hope you're well, Joey. Quick question: the only reason to wait until the last minute is purely so you don't have to give up your money, right?

I recently inherited an IRA and, since I'll be taxed on it, I made an estimated tax payment immediately thinking I'd get ahead of it for next year—was that a mistake?

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Thanks. Not too bad laying low and I’ll actually be a permanent NH resident in two weeks. That’s is correct the only reason for waiting is to hang onto your funds as long as possible.

As far as the IRA I wouldn’t call it a mistake at all. It depends on the amount of the distribution. I assume there was no withholding on the distribution? Assuming 2020 is similar to 2019 as far as your income goes there should be no underpayment penalty but I am conservative and since the market is unpredictable these days and saving rates are low I would have recommended an estimated payment especially if the amount was significant.


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[thinkxingu]

Originally Posted by joey2665

Thanks. Not too bad laying low and I’ll actually be a permanent NH resident in two weeks. That’s is correct the only reason for waiting is to hang onto your funds as long as possible.

As far as the IRA I wouldn’t call it a mistake at all. It depends on the amount of the distribution. I assume there was no withholding on the distribution? Assuming 2020 is similar to 2019 as far as your income goes there should be no underpayment penalty but I am conservative and since the market is unpredictable these days and saving rates are low I would have recommended an estimated payment especially if the amount was significant.


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Congrats on moving to NH! Maybe we can connect at some point. I think I saw Cal Coon yesterday but by the time I realized it (I was high from an amazing day on the ski with my children) I'd entered a NWZ and had to get back home for the night.

In any case, thanks for the clarification. It wasn't a huge inheritance—my father lived much longer than he ever planned—but enough to buy a new ski cash and pay off a bunch of bills!

We were advised to take the distribution without withholding taxes as then we can fill out "Form K's" for the beneficiaries to take care of taxes independently, which would reduce the amount of overall taxes significantly. Does that make sense?

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