Get your taxes done using TurboTax

@t9542df   The default calculation used for determining an underpayment penalty?   

That assumes that all of the IRA withdrawal was made evenly over the months of the year, thus resulting in underpayment penalties for some of the quarters.  There is nothing on the 1099-R that indicates when exactly the distribution was made.  So to either reduce, or possibly eliminate the penalty, you prepare the form 2210AI form (Annualized Income) to indicate exactly how much income was made in each quarter of the year, and exactly when your withholding and estimated payments were made.   This is accessed on the "Other Tax Situations" tab in the software, in the "Underpayment Penalties" section.

Generally, that form can be a pain, because you have to gather all your info for the year and subdivide it by so-called quarters (3mo, 2mo, 3mo, 4mo), and having done it once, I haven't bothered to use it for an occasional penalty less than $50.

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But yeah, one fairly easy way to avoid/minimize penalties, or having to work with the form 2201AI in the future, is to increase your actual tax withholding from W-2 income, or other pension income during the year, such that it covers the taxes for any planned IRA withdrawals/conversions to a ROTH IRA during the year.   Of course, those who have significant Mutual Fund holdings in taxable accounts can't know what level of distributions will happen near year-end, and possibly mess up their tax payment plans for the year.