Vanguard Tax Withholding Capability

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fandango
Posts: 518
Joined: Wed Dec 08, 2010 6:44 pm
Location: Greater Atlanta area

Vanguard Tax Withholding Capability

Post by fandango »

Has anyone used Vanguard's tax withholding capability on taxable accounts (dividends and capital gains distributions)? I have talked to three Vanguard customer service representatives and have had three different answers on how it works. Answers range from "we can't do it" to we "can easily do it at a flat 28% rate, but must withhold from all taxable accounts including those containing tax exempt funds".

I have to pay some additional taxes from my Vanguard investments this year and am looking at withholding some taxes from my taxable accounts. Not from tax exempt funds. Not sure that I will use their withholding capability yet, but I want to understand how it works.

This is the first time I have ever been diappointed in Vanguard's response to questions. They really seem to stumble on this question and when I probe more deeply about the answer that they gave me
they just fall apart. I have asked to speak to a "specialist" in this area, but they will not refer me. Just keep giving me different answers to the same question.

Thanks for your help.
TheGreyingDuke
Posts: 1823
Joined: Fri Sep 02, 2011 10:34 am

Re: Vanguard Tax Withholding Capability

Post by TheGreyingDuke »

You could also consider making estimated tax payments using the automated eftps system that is available. I am out of the country for two payments each year and this has been a great way to be sure it all gets done on time.

https://www.eftps.gov/eftps/
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells
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StoneReader
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Joined: Tue Feb 27, 2007 7:42 pm

Re: Vanguard Tax Withholding Capability

Post by StoneReader »

I have been using it for my taxable IRA distributions. You select the withholding rate that you want. You can do everything on the website after you have signed in. Withholding on my taxable IRA distributions did not apply to my other taxable accounts. I have never tried withholding for my regular taxable accounts.

Vanguard will only withhold my Federal taxes and not my NYS taxes.
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