Generally, the IRS is happy if you can meet one of two withholding tests. You can either pay them 100% of the tax you owed last year (110% for higher AGIs) or 90% of the tax you will owe this year. You can prepay this taxation through either tax withholding or estimated tax payments.

Generally, Schwab is happy if you have told them what you want your tax withholding elections to be. They accept anything from 0% to 99%, so long as you have made an election. If you forget to fill out your tax withholding elections when filling out a new account application, this article can help you make that change.

Without specific tax withholding elections provided by the client, Schwab has empowered themselves to set the withholding elections to 10% federal tax withholding and a variable state tax withholding percentage based on your address on record. However, Schwab does not want to exercise this option and will instead delay distributions while awaiting your withholding elections.

Fortunately, the steps to declare your tax withholding elections are fairly simple to accomplish online.

The first step is to login to Schwab.com.

Then, currently, the fastest way to get to the tax withholding elections page is via this URL https://client.schwab.com/app/transfers/twe.

If that link doesn’t work, there are two more options.

You can search for “Tax Withholding” in the search box and click on the “Tax Withholding Election” result.

You can also get to the same page by clicking on “Transfers & Payments” under the “Move Money” tab. On the page that loads, scroll down to the bottom. In the “How else can we help you?” section, you can click on the “Edit tax withholding elections” choice.

The page that loads will be a simple page with the heading “Update your tax withholding elections.”

You can use the blue “Select Account” box to select the account you’d like to update the elections on.

Each time you click on a different account in the drop down menu, it will load that account’s current withholding elections.

To update the elections, type a new number in the input fields.

Then, scroll to the bottom and click the green “Continue” button.

On the new page that loads, verify the new election, click the “I agree” checkbox to agree to the terms, and then click the green “Submit” button.

Schwab will then receive your request and begin to process your withholding update.

If you have questions or need more assistance, feel free to call Schwab Alliance at 800-515-2157 and speak with a Schwab team member directly.

Photo by Pavel Danilyuk on Pexels. Image has been cropped.