Applying for Retirement? New IRS Withholding Rules

New IRS withholding rules make your withholding more accurate when it comes to your personal income tax situation.

By Leah Golden

When you apply for retirement online at TCDRS.org, you will indicate what money you would like withheld from your monthly payment for taxes. The withholding section of the application will lead you through the new IRS withholding questions and populate your withholding form.

Here are answers to some of the common questions we get about the new IRS withholding rules.

What information will I need to calculate my withholding?

Under IRS rules, you will need your tax filing status (married filing jointly or qualifying widow(er), single or married filing separately, or head of household), as well as the amount of other income you or your spouse receive. You will also need to provide amounts for additional adjustments and withholding. For more details about what information you will need to complete the form, check out the IRS Form W-4P.

You can change your withholding at any time.

Why do you need to know about my spouse’s income or my other income?

The new IRS withholding calculation takes these income sources into account to help you determine a more accurate withholding amount for your tax situation.

We do not share this information with the IRS. We use only the final withholding amount for your monthly benefit payment from TCDRS.

Can I just tell you a dollar amount to withhold?

The IRS does not allow taxpayers to choose a single dollar amount for withholding.

How will I know how to fill in my withholding information?

The online retirement application walks you through the process. Instructions are also available on page 2 of the IRS Form W-4P. It would also be a good idea to speak with your tax advisor about your personal tax situation.

What if I want to apply for retirement now but don’t know all the answers to the withholding questions?

You can move forward in the process without filling out all the information. You can submit your retirement application and update your withholding once you have collected the information you need.

If you skip the withholding portion of the application, we will apply the highest amount of withholding, which is Single. However, you can change your withholding at any time. Once you determine the withholding that’s right for you, you can apply that to your benefit.

Do I need to send you a separate W-4P form?

No. Filling it out as part of your retirement application is all you need to do.

How can I get a copy of the W-4P I filled out during my retirement application?

You will receive a copy of the W-4P you filled out when you submit your retirement application.

 

 

 

Benefits Retirement Prep