Thank you VolvoGirl.
I did go back into TurboTax and followed directions to get to the Annualized Income section. It reduces the penalty from $164 to $17. I then ask for a waiver of this $17.
One last comment. I believe the method that may work best is to use the "Withhold and Replace" strategy to take advantage of IRC §6654(g). Take the $70K Roth conversion in October and designate $13,115 of it to go to the IRS as Withholding. Thus $56,885 lands in the Roth directly from the conversion. Then deposit $13,115 from savings into the Roth within 60 days, completing the $70K to Roth. This works because Federal withholding, per IRC §6654(g), is deemed paid ratably across all four quarters regardless of when the withholding actually occurs. No underpayment penalty.
