@jayhawkdave wrote:
In December 2020, I rolled over my wife's 401k for over $348,000 from a previous employer and withheld 10% for taxes into her current Roth IRA and now I am being taxed more than $52k for this transaction in addition to the 10% I already took on this transaction. They sent me a check in her existing Roth IRA's name with the 10% tax taken out already and I bought more shares of the current mutual fund in her already existing Roth IRA. What can I do to avoid paying the large federal tax burden? Not sure why I am being taxed so much for this.
The $52K tax on the $348K Roth conversion indicates that you are in the 15% tax bracket so 10% ($34,800) will not be enough to pay the tax. The 1099-R box 4 amount will go on the 1040 line 25 to offset your total tax liability for all your income. Looks like you will owe and additional $17,200 in tax that was not withheld.
**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.**
