I’ll be doing a Roth conversion at end of year. I ...
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I’ll be doing a Roth conversion at end of year. I will owe a large amount of tax. If I make an estimated payment brief year end, will I avoid a penalty? I’m not sure about the timing require

 
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Employee Tax Expert

I’ll be doing a Roth conversion at end of year. I will owe a large amount of tax. If I make an estimated payment brief year end, will I avoid a penalty? I’m not sure about the timing require

The next quarterly estimated payment for 2019, is due on January 15, 2020, or you can mail the full payment with your completed return on January 31, 2020. The second option may not be feasible, as you likely won't have all the documentation you need to file your return by January 31. However, if you overlook something, you can always amend your return.

 

When you file your return, remember to fill out the estimated penalty Form 2210, showing that you did not owe the large tax payment until the last quarter of the year, and that you paid it timely. This should satisfy the IRS and keep you from a penalty situation. If they do try to collect, be certain to respond to any letters, showing your payment made in a timely manner. You can make the payment online at https://www.irs.gov/payments There will be little argument about when you made your payment if you don't mail it.

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I’ll be doing a Roth conversion at end of year. I will owe a large amount of tax. If I make an estimated payment brief year end, will I avoid a penalty? I’m not sure about the timing require

Needing to perform the onerous task of annualizing income on Form 2210 is an unfortunate consequence of incurring a large amount of reportable income late in the year, not having sufficient taxes withheld throughout the year to cover the additional tax liability and needing to make a Q4 estimated tax payment to make up the difference.  Without annualizing, the default calculations on Form 2210 will result in a determination of an underpayment penalty for the earlier quarters of the year since, by default, income and regular tax withholding are treated as having been received and paid uniformly throughout the year while estimated tax payments are not.

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