The Internal Revenue Service and the Treasury Department issued proposed regulations Wednesday to update the income tax withholding rules for periodic retirement and annuity payments made after Dec. 31, 2020.
Before Congress passed the Tax Cuts and Jobs Act in late 2017, if no withholding certificate was in effect for a taxpayer’s periodic retirement and annuity payments, the amount to be withheld from the payments was determined by treating the taxpayer as a married individual claiming three withholding exemptions.
The TCJA changed that rule so the rate of withholding on periodic payments when no withholding certificate is in effect would instead be determined under rules prescribed by the Treasury.
Earlier this year, in Notice 2020-3, the IRS said that, for 2020 the default rate of withholding on periodic payments will continue to be based on treating the taxpayer as a married individual claiming three withholding allowances when no withholding certificate is in effect. But now, under the proposed regulation issued Wednesday for 2021 and future years, the Treasury and the IRS will be providing the rules and procedures for determining the default rate of withholding on periodic payments when a taxpayer has no withholding certificate in effect in applicable forms, instructions, publications and other guidance.
Read More: https://www.accountingtoday.com/news/irs-proposes-rules-for-retirement-and-annuity-payments
Anil Vazirani is president of Secured Financial Solutions, independent insurance advisor investment advisor rep with a fiduciary obligation and in the financial services industry since 1994. A+ rating with the Better Business Bureau for over a decade and a half, members in good standing with the National Association of Insurance and Financial Advisors.
Dial 1-800-957-5604 x 200 and set up a complimentary strategy session to understand what your goals are, understand what objective you’re trying to accomplish, your risk tolerance, and let us show you how to reduce your investment fees from stocks, bonds and mutual funds down to one point, or five percent when you work with our investment advisory platform. Dial 1-800-957-5604 x 200, and on the web at: DreamRetire.com
Anil Vazirani Integrity and Professional Background – Click Here
RETIRE AND STAY RETIRED,
SAFE, SMART, AND SECURE!
Call today for a Complimentary
Strategy Session: 1-800-957-5604 x 200
Secured Financial Solutions
14301 North 87th Street, Suite # 216, Scottsdale, AZ 85260