RORH Conversion in December 2025 and January 2026 - when and how much Tax is due

Forum|Forum|5 months ago
February 1, 2026
1 reply
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Speaking hypothetically when and how much Tax is due; I think the following is correct:

IRA to Roth conversion day after Christmas in December 2025

- tax is due by 15 January

- amount due is the full conversion amount times where my final tax bracket for 2025 lands

if I do miscalculate this then both Safe Harbor Rules are met, and I can pay it upon filing my taxes 15 April:
- 1st as long as I paid 110% or more than my 2024 taxes

- 2nd as long as 90% of my 2025 tax was paid by Jan 15th

- my tax bracket is based on my 2025 year's AGI + the amount I converted.

- if this total amount puts me in the 32% bracket, I should multiply the converted amount times 32%

In order to not be penalized for the underpayment penalty and interest, the whole year, what form do I file with my taxes to show I made the correct quarterly payments, I recall correctly, I would put in:

- 25% of full years taxable income for Qtr. 1,

- 50% of taxable income for Qtr. 2

- 75% of taxable income for Qtr. 3

- 100% of taxable income + the IRA to Roth conversion amount.

I also think I enter the taxes I paid straight from my YTD taxes paid, located on my company's paycheck during each Qtr., then add the 35% tax I paid on 15 Jan 2026 to the fourth Qtr.

For this year's mid-January 2026 Roth Conversion my total tax owed will be a lot less than last year.

- I only will have the 90% Safe Harbor Rule to cover any mistakes in calculating my Taxes for 2026.

- when is the Jan 15 tax due, and what tax amount is due? I see a lot of different stories:

- immediately when conversion is made

- before January 31, 2026

- before the end of the 1st Qtr (31-March 2026)

- before 15 April 2026 filing deadline.

- divide the total tax due on the Jan 15 Roth conversion by 4, pay 1/4 of the total amount each Qtr. in 2026

- regardless I did Qtr. filing last year, it will automatically fall back to IRS assuming pd throughout the year?

As for the amount due on the dates above is it the full 32% (except if I am allowed to do the 4 Qtr. payments above without any penalties)

Next year I plan use the withhold tax from the conversion and pay it back before 60 days,

- will I pay back to the IRA (needing to convert this payback later if it puts me in a higher bracket).

- or will it get put into the ROTH where I don't have to worry about it

I have been doing the Mega Back Door Roth Conversions in my Employer's 401K for both pre-tax and after-tax a few years now. I have not been putting any money in a std IRA for me nor am I allowed to put more money for my unemployed wife's ROTH. I don't think any of this impacts my ROTH conversion?

Or am I allowed to contribute to my unemployed wife's Individual ROTH for last year and this year?

Best answer by DaveF1006

You’re generally correct but IRS timing and form rules can be tricky if they're not clear. Here’s what you need to know.

You are correct that the tax on a conversion is based on your marginal tax rate (your top bracket).

December 2025 Conversion: Since the income was "received" in Q4 (Sept 1–Dec 31), the tax payment is due by January 15, 2026.
January 2026 Conversion: Even though it’s only a few weeks later, this is a 2026 tax event. The payment is due by the Q1 deadline: April 15, 2026.

The IRS default is to assume you earned your income evenly throughout the year. If you make a huge payment on Jan 15 for a Dec conversion, the IRS will think you were "late" for Q1, Q2, and Q3.

The Solution: You must file Form 2210, Schedule AI (Annualized Income Installment Method).
How it works: You don't just put 25%/50% of your total year's income. You actually report what you actually earned during specific windows:

Column A (Jan–Mar): Only your standard salary/income.
Column B (Jan–May): Only your standard salary/income.
Column C (Jan–Aug): Only your standard salary/income.
Column D (Jan–Dec): Your full year salary + the Roth Conversion.
The Paycheck Data: You are correct—you pull your actual YTD federal withholding from your paystubs for those specific dates and enter them into the form. This "proves" to the IRS that you didn't owe the extra tax until the conversion happened in Q4.

Regarding the 60 payback, it has a specific destination requirement:

Where to pay it back: You must pay the "withheld" amount back into the Roth IRA.
Why: A Roth conversion is a distribution from a Traditional IRA that is rolled into a Roth. To have the entire amount count as a conversion (and avoid a 10% early withdrawal penalty on the portion sent to the IRS), you must ensure 100% of the distributed amount ends up in the Roth.
The Timing: You have 60 days from the date of the conversion to "replace" the withheld taxes using outside cash. Once that cash is in the Roth, it stays there and grows tax-free.

You are allowed to contribute to a Roth IRA for your unemployed wife! As long as you have enough "earned income" (salary) to cover both your 401k contributions and her IRA, you can contribute. For 2025, the limit is $7,000 ($8,000 if she's 50+). For 2026, it's $7,500 ($8,600 if 50+).

DaveF1006Answer

Level 15

You’re generally correct but IRS timing and form rules can be tricky if they're not clear. Here’s what you need to know.

You are correct that the tax on a conversion is based on your marginal tax rate (your top bracket).

December 2025 Conversion: Since the income was "received" in Q4 (Sept 1–Dec 31), the tax payment is due by January 15, 2026.
January 2026 Conversion: Even though it’s only a few weeks later, this is a 2026 tax event. The payment is due by the Q1 deadline: April 15, 2026.

The IRS default is to assume you earned your income evenly throughout the year. If you make a huge payment on Jan 15 for a Dec conversion, the IRS will think you were "late" for Q1, Q2, and Q3.

The Solution: You must file Form 2210, Schedule AI (Annualized Income Installment Method).
How it works: You don't just put 25%/50% of your total year's income. You actually report what you actually earned during specific windows:

Column A (Jan–Mar): Only your standard salary/income.
Column B (Jan–May): Only your standard salary/income.
Column C (Jan–Aug): Only your standard salary/income.
Column D (Jan–Dec): Your full year salary + the Roth Conversion.
The Paycheck Data: You are correct—you pull your actual YTD federal withholding from your paystubs for those specific dates and enter them into the form. This "proves" to the IRS that you didn't owe the extra tax until the conversion happened in Q4.

Regarding the 60 payback, it has a specific destination requirement:

Where to pay it back: You must pay the "withheld" amount back into the Roth IRA.
Why: A Roth conversion is a distribution from a Traditional IRA that is rolled into a Roth. To have the entire amount count as a conversion (and avoid a 10% early withdrawal penalty on the portion sent to the IRS), you must ensure 100% of the distributed amount ends up in the Roth.
The Timing: You have 60 days from the date of the conversion to "replace" the withheld taxes using outside cash. Once that cash is in the Roth, it stays there and grows tax-free.

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