Newly retired so new to estimated taxes. Married filing joint. Going to send husband's 2023 RMD to the fed for 2023 taxes before year end. After making some QCD's, the remaining RMD will cover an estimated 50% of the fed taxes owed. Didn't send estimated for Q1 or Q2 as the amt owed based on income and dividends was so low. Trying to figure out how much to send for Q3.
- We anticipate half as much on 2023 Schedule A due to lower medical expenses (thankfully) so will owe more tax, but is it correct that for safe harbor, we only need to send estimated payments equal to what we owed last yr plus 10% in advance, even if we suspect we will owe more due to lower schedule A?
- Over half of our "income" for 2023 will be from a Trad IRA to Roth conversion--the max we can convert on top of our Social Security without triggering IIRMA. This conversion will probably take place in Q4. Since this is not realized income as of Q3, is it correct that we don't need to send in any estimated tax for it in Q3?
- Is it reasonable and correct to send the amount for Q3 that, when added to the RMD amount, would equal 3/4 of the safe harbor amount? Example using dummy numbers: If safe harbor is $20k, RMD is $10k. 3/4 of $20k is $15k, less $10k from RMD so send $5K for Q3?? And then send last 1/4 of safe harbor amt on Jan 15? Or something different because over half of the "income" will be in Q4 from the Trad to Roth, or for some other reason?
- Also, saw something that we don't need to make Q4 estimated in Jan if we pay taxes on time in April. Is that right? With the large amt of income from the Trad to Roth conversion in Q4, wouldn't they want the money sooner?
- Note: seems hard to have TT calculate amt owed bc there are so many differences since last year and also a lot of unknowns for the rest of the year. .
Thank you so much for any answers!
