Quarterly taxes
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New Member

Quarterly taxes

I am now retired and will have to start paying quarterly estimated taxes. It is my understanding that Uncle Sam wants taxes paid in the quarter that income is made. I plan on converting funds from my traditional IRA to a Roth IRA. So I will have a "chunk" of income in one quarter and the other quarters will have much lower income. How do I calculate the taxes I will owe for the quarter when I do the Roth conversion?

3 Replies
Level 15

Quarterly taxes

If you are going to use IRA money to pay the tax then you can simply have the financial institution withhold any amount for tax that you specify.


If you will pay the tax from other funds and pay estimated tax then when you file you use form 2210 to show the the amount of income in each quarter of the year and the estimated tax paid to allow for "lump sum" income in one quarter.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Expert Alumni

Quarterly taxes

Yes, you will want to pay the estimated tax for your ROTH IRA contribution in the quarter you received it to avoid the penalty.  When you receive a taxable distribution from an IRA you have the option to have tax withheld from it by the IRA custodian to be remitted directly to the IRS. In fact, by default the custodian will withhold 10% of the distribution. However, you can instruct the custodian to withhold either 0% or more than 10%, up to as much as 100%.


See Estimated Taxes: How to Determine What to Pay 

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Level 15

Quarterly taxes

your estimated tax penalty will depend on what was your tax due in the last year.

As long as you have prepaid 90% of that (110% for high income) that's all you have to pay in before Tax Day.

That usually applies for the first year your income goes way up.

In retirement your income may be going down, but not if you make a big Roth Conversion.

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