dmertz
Level 15

Retirement tax questions

"Do I need to be mindful of when I do the roth conversion?"

 

Generally not.  As long as your tax withholding is sufficient to cover your entire tax liability for the year, it doesn't matter since, by default, your income and tax withholding are treated as being received and paid uniformly throughout the year.  Also, as long as your tax withholding is at least 100% (110% if your 2021 is greater than $150,000, $75,000 if married filing separately) of your 2021 tax liability, it doesn't matter.

 

The only reason that it might matter is if you do a Roth conversion early in the year and your tax withholding is insufficient to meet one of the safe harbors mentioned above.

 

Estimated tax payments are less desirable because, unlike tax withholding, they are treated as paid on the date they are actually paid, so you can't eliminate an underpayment for one tax quarter by making an estimated tax payment in a later quarter.  That payment would only reduce or eliminate an underpayment for the quarter in which it is paid and beyond.