DEAR HARRY: My question relates to estimated federal income taxes (Form 1040-ES). I am retired, and I have filed estimated tax returns because of my interest and dividends. I find this tough to have to deal with on a quarterly basis. Can I avoid doing this by having enough tax withheld from my Required Minimum Distribution from my IRA? I take my entire RMD in December. Does this make it more difficult? I don't mind paying taxes; it's the penalties and interest that I hate. I filed a 1040-ES for this year and made my first quarterly payment. My tax preparer said that I'll get hit with a penalty if I make the change. Help!

WHAT HARRY SAYS: Good news: Your tax preparer is wrong. The tax withheld will be deemed to have been paid ratably through the year so there will be no penalty. Since you already made a payment, take enough out of your RMD to get your total tax amount at a couple of bucks above your 2013 taxes. There will be no penalty and no nuisance with the remaining quarterly 1040-ESs. I have suggested this method to a number of retired friends who have been doing it this way, and all are pleased. A similar situation can be had with RMDs that are taken monthly or quarterly. Incidentally, taking your RMD at the end of the year keeps the "government's money" working for you.

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