Distributions from qualified retirement plans are subject to a mandatory 20% withholding unless the funds are directly transferred to another retirement plan or IRA. However, other types of retirement plan distributions are subject to different mandatory withholding rules, or you can opt for voluntary withholding.
Periodic payments. For distributions payable over more than 1 year, such as pension benefits, you can choose between mandatory withholding based on wage withholding tables or your own withholding. This can be at a different rate or a specific amount of additional tax for each payment.
Nonperiodic payments. For distributions such as IRA distributions payable on demand, a mandatory 10% withholding applies unless you elect not to have any withholding taken from the payment.
You’ll need to complete Form W-4P to put alternative withholding into effect.
As of April 12, the IRS reported that 108.5 million returns had been filed (2.1% fewer than at the same time last year). But e-filing for self-prepared returns increased by 3.1% to 36.4 million returns. The average refund on 2012 returns was $2,902 (down from the average of $2,958 for 2011 returns).View all factoids