I am 62 and live in Illinois. I plan to make a withdrawal from my Traditional IRA in December of 2024. I will be asking Fidelity to withhold 24% in Federal Taxes (& Illinois State Tax for 5% if they do it).
Am I required to pay any estimated Federal/State Taxes Quarterly starting in Q1, 2024 ? Logic would state that since I receiving the proceeds in December 2024 and Taxes and being held at Source in the same Month, that I should be NOT be paying Estimated Taxes during the Year 2024.
The reason I ask this Question is because the IRS assessed me a small penalty for a 2022 tax Year Situation. I had converted $50,000 of 401K to a ROTH IRA on June 30, 2022 with no Taxes withheld. I went to the IRS Payment site and made a $12,500 Estimated Tax Payment on July 5th, 2022. I though I did everything correctly. However, when I filed my Taxes they deducted a $150 "penalty" from my Refund due because they stated that I had NOT made estimated Taxes in every Quarter. When I called the IRS phone number, I was given a round about answer that since the IRS did not know when the ROTH conversion took place in 2022, I should have made estimated Tax Payments. They said I should have filed some Form (??) that shows my 2022 Income every Quarter. When I saw the form and the information required, I decided to write a simple letter explaining the situation to the IRS. Have not heard back yet. I had an EA prepare my Tax Returns for 2022 and I am not sure if the EA should have filled out that Form that the IRS individual referred to.
TIA
