How to Change Your Schwab Tax Withholdings

For us to send money to you from your IRA at Schwab, you must elect how much to withhold for Federal and State Taxes. We will tell you the percentages, but only you can change the amounts.

Why Do I Need to Change My Withholdings?

We usually set your IRA to withhold taxes at your effective tax rate (the average of all your tax brackets). Then when we send you income from your IRA, the taxes are taken care of.

We may also change it for Roth Conversions, which come out at your highest marginal tax rate. Perhaps it’s set at 15% for regular income. We may change it to 22% for a Roth Conversion and then have you change it right back for income.

Changing tax withholdings is much better than owing taxes and penalties at the end of the year.

Use the following Walkthrough to change your withholdings at our request.

Walkthrough

Step 1 – Log in to Schwab

Log in to your Schwab Account. Select Menu at the top.

Step 2 – Select “Transfers & Payments”

Under “Move Money” select “Transfers & Payments.”

Step 3 – Scroll to Bottom of “Transfers & Payments”

Step 4 – Edit Tax Withholding Elections

Select “Edit Tax Withholding Elections” from the “How else can we help you?” menu.

Step 5 – Select Correct Account

Select the account we want you to change withholdings on from the dropdown menu, usually your Contributory IRA or Rollover IRA.

Step 6 – Adjust Tax Withholdings

Set your Federal AND State tax withholdings to whatever we have requested. Select “Continue.”

Step 7 – Review and Submit Tax Withholdings

Review for completeness. Check the box and select “Submit.”

Step 8 – Finished. Notify Financial Planner

Green means Good. When you see this box, you are all done with this account. Be sure to notify your planner.

Done

That’s it. Hopefully that wasn’t too bad.