topic ROTH CONVERSION 2021 in Get your taxes done using TurboTax

ROTH CONVERSION 2021

lbonawitz — Wed, 26 Jan 2022 17:04:45 GMT

With regard to paying tax on the conversion am I penalized for not estimating taxes for the year if the conversion took place during the last week of the year?

Re: ROTH CONVERSION 2021

RobertB4444 — Wed, 26 Jan 2022 17:11:23 GMT

You may be penalized but the IRS has a section of form 2210 that allows you to annualize income and show when during the year it was received and that will certainly help reduce the penalty in your case.

TurboTax will offer to help you annualize the income if a penalty is assessed by the program.

Re: ROTH CONVERSION 2021

lbonawitz — Wed, 26 Jan 2022 17:33:23 GMT

Thank you Robert, Does it matter that I sent an estimated payment to the IRA just after making the conversion?

Also, is the Roth conversion still available in 2022 since the build back better plan has not been passed?

Re: ROTH CONVERSION 2021

DanaB27 — Wed, 26 Jan 2022 18:05:55 GMT

If you made the estimated tax payment in 2021 it will help. Please make sure you enter your 2021 estimated payments:

With your return open, click on "Search" in the top right and enter "estimated tax payments"
Click the "Jump to" link
Choose "Start" next to the type of estimated tax payment you'd like to enter
Enter the amount of estimated tax you paid at each of the quarterly due dates

Yes, under the current law, Roth conversions are still allowed since the Back Better Plan hasn't passed.