Thank you NCperson! Thanks for the info that using IRA money to pay taxes due on a Trad to Roth conversion is less financially beneficial. I have made several Trad to Roth conversions in prior years when our income was low and again last year. So far, always paid the tax w non-IRA $ for this exact reason. Hope to this year as well!
To Anyone:
- Do I have it correct that regardless of whether you pay estimated taxes in four equal quarters or use the annualized plan (Schedule A1), that the total amount paid will be the same. (basically the difference between the four equal quarters and annual plans is that one has the same payment each Q and the other varies based on actual quarterly data)?
- Also is it true that estimated taxes due for current year are based solely on prior year data, not what you are actually getting during the current year (much more, much less income, deductions)?
Thank you to EVERYONE who has responded. Greatly appreciate all the help and info shared. I feel ready to make decisions and move fw for 2023 and, hopefully, for changing situations in years to come.
