topic Estimated Tax payment for Roth conversion in Get your taxes done using TurboTax

Estimated Tax payment for Roth conversion

gamb457 — Thu, 09 Jan 2025 23:13:43 GMT

My husband and I both did a large Roth conversion on December 20,2024 from our IRAs . I will owe a significant amount of tax for 2024. I have had small amounts withheld from my husband's and my social security and a small amount from a pension my husband gets but I missed paying 100% of our 2023 total tax liability by $1,320. My question is how to best avoid penalty and interest charges. Should I make the estimated payment on 1/15/2025 for what I estimate to be 90% of my 2024 tax liability or can I just pay the $1,320 that I am short to have paid 100% of our 2023 tax liability.

Re: Estimated Tax payment for Roth conversion

Bsch4477 — Fri, 10 Jan 2025 02:57:31 GMT

To avoid a penalty make the estimated quarterly payment before January 15.

Re: Estimated Tax payment for Roth conversion

baldietax — Fri, 10 Jan 2025 04:03:13 GMT

I think the answer of how much to pay depends on which is smaller - 90% of 2024 tax or 100% of 2023 tax (110% if AGI > 150k) etc, see https://www.irs.gov/faqs/estimated-tax

Due to the Roth conversion in Dec, when you do the final filing you may need use Form 2210 to reflect the uneven tax liability & payments throughout the year, otherwise there may still be a penalty even if you meet the minimum total.

I'm just going thru similar process myself for a Roth conversion in Q4; I put draft totals into TT to confirm the Q4 ES by looking at the penalty calculated on Form 1040.