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State tax filing
@DanPaul02 wrote:
You will not occur a penalty, but will owe ordinary income tax on the money that is converted.
There might indeed be an underpayment penalty depending on the following:
You may avoid the Underpayment of Estimated Tax by Individuals Penalty if:
- Your filed tax return shows you owe less than $1,000 or
- You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less.
The estimated tax should be paid it the same quarter that the conversion occurred, however the IRS has no way to know when the conversion took place as the date is not reported by anyone to the IRS.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
‎August 10, 2021
2:31 PM