I took an IRA distribution in December of last year, and put the proceeds back, by converting to a Roth IRA for the same amount. Does it pay for me to annualize the income, since I did this in December, to lower my $45 penalty for underpayment for the whole year? Also, should I use the annualization method to determine my taxes on my Massachusetts return? On the Mass form, it shows total yearly income as $10K less than it should be?
