topic Re: Roth conversion in Fourth Quarter in Get your taxes done using TurboTax

Roth conversion in Fourth Quarter

carterrd — Sat, 14 Feb 2026 01:33:42 GMT

I make a Roth conversion Go/NoGo decision each October. This past year (2025) was my first year using this strategy. I did a $70K conversion on 10/10/2025. I immediately (next day) went to the IRS site and made a direct payment of $13,115. Turbo Tax is calculating I will have a Penalty/Interest amount of $164. If I do not know whether I will have a conversion until October, how can I avoid this penalty without grossly overpaying if I choose not to do a Roth conversion?

Can I go into my Turbo Tax return and force it to use the Form 2210 annualized income method?

As a retired engineer, I created a detailed spreadsheet that documents monthly incomes, interest earned, Federal Tax withholding, etc. and calculates MFJ federal tax. That spreadsheet was within $1 of Turbo Tax solution, EXCEPT this $164 penalty. 😕

Re: Roth conversion in Fourth Quarter

baldietax — Sat, 14 Feb 2026 01:50:07 GMT

yes AI method should help you reduce or eliminate the penalty and is for this purpose, to align uneven estimated taxes with uneven income; you can go through it under Other Tax Situations / Underpayment Penalties.

the other way to avoid this going forward if you plan to make regular conversions, is to make quarterly estimated tax payments based on prior year tax

Re: Roth conversion in Fourth Quarter

carterrd — Sat, 14 Feb 2026 02:00:47 GMT

Thank you baldietax,

I will look into the Form 2210.

I never know if I am going to make the Roth conversion before October looking at the year's income.

Re: Roth conversion in Fourth Quarter

VolvoGirl — Sat, 14 Feb 2026 02:29:24 GMT

If you get a penalty on 1040 line 38, 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.

How to add form 2210 for Underpayment Penalty
https://ttlc.intuit.com/community/tax-payments/help/how-do-i-add-form-2210/00/25703

It's under

Federal tab or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

Re: Roth conversion in Fourth Quarter

carterrd — Mon, 16 Feb 2026 16:23:11 GMT

Thank you VolvoGirl.

I did go back into TurboTax and followed directions to get to the Annualized Income section. It reduces the penalty from $164 to $17. I then ask for a waiver of this $17.

One last comment. I believe the method that may work best is to use the "Withhold and Replace" strategy to take advantage of IRC §6654(g). Take the $70K Roth conversion in October and designate $13,115 of it to go to the IRS as Withholding. Thus $56,885 lands in the Roth directly from the conversion. Then deposit $13,115 from savings into the Roth within 60 days, completing the $70K to Roth. This works because Federal withholding, per IRC §6654(g), is deemed paid ratably across all four quarters regardless of when the withholding actually occurs. No underpayment penalty.

Re: Roth conversion in Fourth Quarter

carterrd — Mon, 16 Feb 2026 16:23:52 GMT

That brings up another question. Does Turbo Tax understand that the Withholding is deemed paid ratably across all four quarters regardless of when the withholding actually occurs? Thus, no underpayment penalty.

Re: Roth conversion in Fourth Quarter

DianeW777 — Mon, 23 Feb 2026 17:56:15 GMT

Yes, TurboTax definitely knows that any type of withholding is considered paid evenly throughout the year. This has always been the case in tax law going back more years than I can count.

@carterrd

Re: Roth conversion in Fourth Quarter

carterrd — Mon, 23 Feb 2026 18:21:29 GMT

Thank you DianeW777.