Roth Conversion without tax penalty? How to pay for the tax (without safe harbor) if I convert mid-year (say 6/1/24)? What form do I need (if any)? From Turbotax?

[luvuboe-gmail-co]

I did a conversion in 2023 and was able to avoid the tax penalty due to safe harbor rule.  I am planning to do another conversion this year 6/1/24. How to pay for the tax (without safe harbor)? What form do I need (if any)? Can TurboTax generate the form for us?

[dmertz]

If you do the Roth conversion between 6/1 and 8/31, it will be Q3 income.  To avoid an underpayment penalty or increase tax withholding from some other income.  (You don't want to pay tax withholding with funds from a traditional IRA distribution since that might be subject to an early-distribution penalty and would defeat some of the benefit of the Roth conversion.  Probably the best approach would be to increase tax withholding from some other source of income, otherwise you'll need to make an estimated tax payments.  To avoid needing to annualize income on Schedule AI of Form 2210, you would want to make four equal estimated tax payments, one for each tax quarter, no matter when you to Roth conversions.

The best way to determine your 2024 tax liability is to prepare a simulated 2024 tax return.  It might be that the 2024 tax return is roughly similar to your 2023 tax return, so you could just tweak a copy of your 2023 tax return.  However, doing this with the online version of TurboTax would require you to use a separate online account and copy all of your data over so as not to mess up your actual 2023 tax return.