@cdenorch wrote:
@Opus 17 If I convert $10,000 from my IRA to a ROTH in November, and send in a 1040ES in November to the IRS, and 100% of my tax liability is covered; then I don't need to send in a 2210? As long as the tax for the conversion is covered within 60 days (1040ES) , and in the same year as the conversion, and all tax liability for the year for all income, is covered; correct? Even if I were to owe the IRS less than $1,000 in additional taxes (presuming my 1040ES payment was insufficient), I would still not need to file form 2210? Thank you.
The IRS wants to see taxes paid evenly. In this case, they will want to see estimated payments of $550 in April 15, June 15, and Sept 15, in addition to an estimated payment on January 15, 2026. This is because they don't know your conversion was done in November, they just get a 1099-R for the whole year, so they assume the income was spread out over the whole year, so they want to see the tax payments similarly spread out.
There is no 60-day rule for paying estimated taxes, they are due quarterly on the dates I gave -- for income paid between Sept 1 and December 31, the tax payment is due by January 15 (so as long as 135 days but as short as 16 days, depending on when the income is paid).
The issue of avoiding the penalty is a gray area to me. On the one hand, you are supposed to be able to avoid a penalty if you owe less than $1000 when you file, or if you pay in at least 100% of last years' taxes. On the other hand, it is very clear that you can be assessed an underpayment penalty even if you make a sufficient late estimated payment, because we have seen people asking for advice on that very question. IRS information is here.
https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty
I would still include form 2210 with schedule AI, to show the IRS that your income varied during the year but your payments in each quarter matched the income in that quarter. Including the form when you file won't harm you if it is not needed, but omitting the form if it is needed could lead to a penalty that you then have to fight.
Of course, if you normally expect a $2000 refund, then you are $500 overpaid for each quarter, meaning that even after the conversion is considered, you are only short $5 each quarter, and that is not enough to trigger a penalty.
