Since every taxpayer's situation is different, STRATA recommends you speak with a tax advisor regarding your RMD distribution. As your IRA custodian, STRATA is required by federal income tax regulations to provide you with the notice regarding your IRA with our organization from which you are receiving payments. Any distributions or Roth conversions completed for your STRATA IRA are subject to federal income tax withholding, unless you exercise your right and elect not to have withholding apply.
When taking a distribution or Roth Conversion, you can choose to have federal and/or state taxes withheld at that time, or you may wait until you file your taxes. Please note, if you do not make an election to withhold federal taxes, then STRATA is required to withhold 10% of any distribution or Roth conversion. STRATA is unable to reverse any federal withholding elections. See IRS Publication 505: Tax Withholding and Estimated Tax available on the IRS website, www.irs.gov.
Your election to have withholding apply or to waive withholding stays in effect unless you change it. You may change or revoke your election at any time and as often as you wish by making a new withholding election. You may incur tax penalties under the estimated tax payments rules if your payments of the estimated tax and withholding are insufficient. Our withholdings notice can be found on every distribution and Roth conversion form, as well as on the forms page on our website. Please review our Withholding Notice and Election form.
If you are uncertain, please seek assistance from your tax advisor who can help determine the amount of withholding, if applicable, for your specific situation. You may use this Marginal Rate Table to help you select the appropriate withholding rate for your distribution or Roth conversion. Please note: If withholding is requested, there must be sufficient cash in your account to remit this withholding amount along with the associated withholding fee.