Personal Investments • Transfer money between accounts at Vanguard

If i want to transfer 10K from ira retirement account to non retirement brokerage account Vanguard wants to withhold 10%
That to me is a double whammy since i already pay taxes (15%) when i sold some of my mutual fund.

Am i missing something or it just the way IRS works.

You did not pay taxes if you sold a stock/bond fund inside the IRA and it stayed in the IRA, but went to a different fund (the settlement fund VMRXX). As @ prd1982 said you only pay taxes when you make a withdrawal from the IRA. So moving it from the Tax-Deferred IRA to your Taxable brokerage account is a withdrawal from the IRA and that triggers the minimum 10% withholding. You should probably elect a higher withholding rate than 10% if your marginal tax-bracket is 22% or higher to avoid under-payment penalty from the IRS (Google "safe harbor rules").

Statistics: Posted by bonesly — Thu Dec 19, 2024 12:50 pm — Replies 3 — Views 156

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