@cdwestlund
(For your 2024 taxes)
1) One way would have been to go ahead and pay 4-qtrs of $750 this year...assuming you were going to convert the same amount....then if you converted less, you'd get some refund. But too late for that now.
2) The next more complex way, is to convert in December, then pay a lump as a single 4th Qtr Est payment before 15 Jan of 2025. That way may still end up with a penalty...BUT...you minimize or eliminate it by going thru the underpayment penalty calculations on the "Other Tax Situations" page in the TTX software. In that section, you can delineate all your income by quarter (pensions, wages, dividends, interest, Cap gains etc), thus showing the converted amount occurred in the last quarter, and that you paid the approx amount due for that last quarter. That Annualized Income method limits...or eliminates the penalty. That creates a form 2210/2210AI which shows the IRS all that more detailed information.
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#1 is easier, # 2 can be a bit of a pain...and I've only done it once for some major unexpected income, and won't do it again for a penalty under ~$50.
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If you are going to do #2 this year, it's a good idea to start a spreadsheet now showing all your types of income every month...so that you can later create the quarterly amounts more easily. (AND the quarters are 3mo, 2mo, 3mo, 4mo). Keep track of your deductions too if you itemize, because those have to be reported by quarter too
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You can see what's in the form 2210/2210AI in Forms Mode if you are using Desktop software.
Or
Go to the IRS forms, search for the form 2210, Open that PDF and scroll down to page 3 to see the 2210AI form setup.
Forms, Instructions and Publications | Internal Revenue Service (irs.gov)
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
