Unable to W/H Fed Tax from RMD Online

[trailmk]

I just spent 30+ minutes online trying to complete my TIRA RMD at Vanguard.

First, I was directed to a new page that apparently only allows you to withdraw from one fund at a time. I also did not find any way to withhold federal income tax from the distribution. I cancelled the order.

I went back and started again and found a link near the bottom of the new page that sent me to the traditional looking page from prior years. I went thru the steps and this time I could sell from two funds. But again, I couldn't see any way to withhold federal income tax, nor could I find any way to send the proceeds to my taxable account. The only options were my TIRA settlement account, a check, or linked banks.

I've been doing this online for 8 years with no problem. This year I am totally baffled.

Has anyone been able to withhold federal taxes and send the proceeds directly to a VG taxable account?
If so how did you do it?

Thanks for any guidance.

[ResearchMed]

I just spent 30+ minutes online trying to complete my TIRA RMD at Vanguard.

First, I was directed to a new page that apparently only allows you to withdraw from one fund at a time. I also did not find any way to withhold federal income tax from the distribution. I cancelled the order.

I went back and started again and found a link near the bottom of the new page that sent me to the traditional looking page from prior years. I went thru the steps and this time I could sell from two funds. But again, I couldn't see any way to withhold federal income tax, nor could I find any way to send the proceeds to my taxable account. The only options were my TIRA settlement account, a check, or linked banks.

I've been doing this online for 8 years with no problem. This year I am totally baffled.

Has anyone been able to withhold federal taxes and send the proceeds directly to a VG taxable account?
If so how did you do it?

Thanks for any guidance.

Are you trying to withdraw *shares* of a mutual fund (or stock)?

Have you tried selling the holding first, and when it settles (to cash), then withdraw the cash you want? There should be a way to specify the taxes.

RM

[trailmk]

ResearchMed,

I am selling the shares. In the past, I could enter the dollar amount to sell from each fund, select the option to withhold federal tax, and then select the VG taxable account for depositing the net proceeds.

Maybe the "new" procedure requires selling and putting the proceeds in your TIRA settlement fund first before you can actually make you RMD and withhold federal taxes. I don't have a balance in my TIRA settlement account so I can't see if that would work.

I would really prefer to accomplish everything in one transaction. I always print the transaction page so I have a record of what was sold, how much was withheld for taxes, and where the net proceeds were deposited all on one page. It was not a multi-step procedure in the past.

Thanks for your suggestion.

[trailmk]

I have solved my problem. I went back to my records from previous years and read my notes. You are correct ResearchMed. I have to have the cash in the settlement account if I want to withhold federal taxes. Duh! As Emily Litella from SNL used to say, "never mind."

Thanks for helping me resolve this puzzle.

[rkhusky]

I recently sent money from a bond fund in my tIRA directly to the settlement fund of my taxable account. I wanted no tax withheld, but there was a default setting for 10% tax. I canceled the order and changed the default to 0% tax and then went back and did the transfer from tIRA to taxable.

Perhaps you need to set the default tax rate to the rate that you want.

[trailmk]

rkhusky,

Thanks for responding. That was part of my problem, I couldn't find any option to send the proceeds to my taxable account in the options presented. I was on the "improved new version" of the page for selling funds. I think the problem is that there is so much "improving" going on at the VG website, that glitches and hiccups randomly show up.

As a workaround, my funds will be sold today and tomorrow I plan to make my RMD distribution from my TIRA settlement account. At that point, I should be able to W/H taxes.

Thanks!

[AAA]

I have solved my problem. I went back to my records from previous years and read my notes. You are correct ResearchMed. I have to have the cash in the settlement account if I want to withhold federal taxes.

Is it different if you ask for the RMD over the phone? I seem to recall telling the rep which fund I wanted the RMD to come from and how much tax to withhold. Maybe unknown to me they did it in two steps.

[rkhusky]

rkhusky,

Thanks for responding. That was part of my problem, I couldn't find any option to send the proceeds to my taxable account in the options presented. I was on the "improved new version" of the page for selling funds. I think the problem is that there is so much "improving" going on at the VG website, that glitches and hiccups randomly show up.

As a workaround, my funds will be sold today and tomorrow I plan to make my RMD distribution from my TIRA settlement account. At that point, I should be able to W/H taxes.

Thanks!

I couldn't remember all the steps, so I went back in to see if I could recreate. Here are the steps that resulted in a single step transaction for moving from my tIRA directly to the settlement account of our joint taxable account:
Select Holdings from the dashboard
Choose Transact:Exchange for the fund in the tIRA account
Goes to an old format page.
Where's the money coming from? enter info
Continue
Where's the money going?
Select taxable account
Select settlement fund, enter info
Continue
Make a tax withholding choice
Click here to update the withholding rate

The first time I did it, I chose Transact:Sell, entered the transfer amount, clicked continue, but then the money was going to the tIRA settlement account. On the next page there was a link where it asked if I wanted to send the money to my bank account and if so, choose the full sell experience, which takes you to the old format page above, where you can choose to send the money to any of your funds or bank account.

After doing it once, it doesn't seem very complicated.

[trailmk]

rkhusky,

Ah-ha! That's what I did wrong. I bailed when I saw that the money was going to my TIRA settlement account. I'm saving the steps you outlined for next year. Maybe the same steps will still work.

Thanks for taking the time to share "the rest of the story" as Paul Harvey used to say.

MK

[mkc]

The first time I did it, I chose Transact:Sell, entered the transfer amount, clicked continue, but then the money was going to the tIRA settlement account. On the next page there was a link where it asked if I wanted to send the money to my bank account and if so, choose the full sell experience, which takes you to the old format page above, where you can choose to send the money to any of your funds or bank account.

After doing it once, it doesn't seem very complicated.

I ran into this a month ago when making a withdrawal from my inherited IRA (which is and always has been a brokerage account). Sometime in the last 3 months is when Vanguard changed to this new "abbreviated" sell page since I did not encounter this in June during my last withdrawal. It's not at all intuitive or apparent that you need to go through additional steps to get to the "full sell experience page" that was the norm presented for years.

[rkhusky]

The first time I did it, I chose Transact:Sell, entered the transfer amount, clicked continue, but then the money was going to the tIRA settlement account. On the next page there was a link where it asked if I wanted to send the money to my bank account and if so, choose the full sell experience, which takes you to the old format page above, where you can choose to send the money to any of your funds or bank account.

After doing it once, it doesn't seem very complicated.

I ran into this a month ago when making a withdrawal from my inherited IRA (which is and always has been a brokerage account). Sometime in the last 3 months is when Vanguard changed to this new "abbreviated" sell page since I did not encounter this in June during my last withdrawal. It's not at all intuitive or apparent that you need to go through additional steps to get to the "full sell experience page" that was the norm presented for years.

If you choose Transact:Exchange, you skip the extra steps. But it is a bit nonintuitive.

Seems like going from tIRA to bank account should be under Sell. But should going from tIRA fund to tIRA settlement fund be under Sell or Exchange? Should going from tIRA fund to taxable settlement or fund be Sell or Exchange?