Quarterly estimated taxes on IRA conversions to Roth Ira

[RaifH]

If you applied your 2020 tax refund to your 2021 return, that will automatically be applied as a first-quarter estimated payment. 

You can then use the annualized method to calculate your underpayment penalty if any. Since a good chunk of your income was earned in the last quarter due to the conversion, this may lower or eliminate your penalty. Even if you don't need to pay a penalty, you will need to include Form 2210 with your return if you otherwise would have had to pay it. 

1. Go to Federal > Other Tax Situations > Additional Tax Payments > Underpayment Penalties and click Start/Revisit.
2. Enter your prior-year information to see if you qualify for the safe harbor rule.
3. In the Annualized Income Method screen, select Yes.
4. Enter your quarterly income and credits by quarter. TurboTax will recalculate your underpayment penalty using the annualized method and if it yields a better result, will allow you to use this method. 

@krisraju

[JWCasey]

We did a Roth conversion in 4th quarter of 2021 and paid the estimated taxes for the conversion in the same quarter (one payment using funds from our current salaries), but Turbo Tax is saying we owe a $49.00 penalty.  We were told we would not be penalized for not making quarterly payments throughout the year as long as we made the tax payment in the same quarter as the conversion.  Even with the penalty, we are still due a small refund from the IRS so we did not underpay our taxes.   Do we need to complete Form 2210 to remove the penalty?  If so, is this form accessible via Turbo Tax Deluxe?  Thank you for your assistance. 

[VolvoGirl]

You might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

If you have the desktop program you can switch to Forms Mode (click forms in the upper right (left for Mac)) and open the 2210 form.  If the 2210 doesn't show up in the left column, click on Open Forms at the top of the left column.  Type 2210 in the search box and open the 2210 form.  Check box C to let the IRS calculate it.