I executed a Roth Conversion in November which resulted in a large amount of taxable income. There were no taxes withheld when the Roth Conversion was made. I made an estimated tax payment on 1/15/2024 in order to make up for the income from the Roth Conversion. A tax underpayment of several hundred dollars is assessed despite there being more than enough tax withheld and paid with the estimated payment.
Is there a simpler method to exempt the tax underpayment penalty besides performing an annualization of my adjusted gross income? Since the Roth Conversion was done at the end of the year, my estimated payment on 1/15/2024 was received by the IRS in plenty of time. I would think that this is a pretty common scenario. Determining when interest, dividends, and stock sales were made is a lot of work to perform to calculate annualized adjusted gross income for the first three quarters of the year!
