Do I need to pay self assessment tax ?

[bibekmishra1]

Hello,

I will be out of US for entire 2023. My only income would be approx 50K 401K to Roth IRA Conversion. Do I need to pay any self assessment tax OR can file the returns in 2024 directly & pay required taxes ?

Can I schedule a 15m to 30m session with an Tax expert to discuss my scenario ?

BM

[RSUMan]

Your filing status will determine the amount of your standard deduction, so you could have taxable income of about $25,000 if filing jointly or $36,000 if single.

I am assuming you will not be itemizing deductions.

So you will have an income tax liability of approximately $3,000 to $5,000 in my simple example.

You should make an estimated tax payment.

You will not owe Self-Employment Tax on the 401 (k) to Roth IRA conversion.

If you used TurboTax Live for your 2022 filing, you can go online or call in to set up a Tax Advice call with one of our Experts.

[JaredS_CPA]

Hello bibekmishra1,

Thank you for participating in the Ask the Experts event. As to your question, if you think you will be owing more than $1,000 in tax at the time you file, it would be a good idea to make an estimated payment for the tax you think you may owe.

Also, you can call us anytime by logging into your TurboTax account and selecting the Live Help link in the lower right of your screen.

I hope that helps.

[bibekmishra1]

Thank You for the detailed response. I will complete the estimated tax payment.

I have a follow-up question, though. While filing the returns at end of year, Should I be filing 1040 NR as I would not be in US for 2023 ?

B M

[JaredS_CPA]

Form 1040-NR is for non-resident aliens. I assume you are a US citizen and have been filing Form 1040. Being a US citizen your global income is taxed no matter where you are living in the world. So, that possibily introduces another element to your situation--you said you would only have the Roth conversion income in the US for 2023. If you will be making any money outside the US for 2023, it could be subject to federal taxes.

However, there is also the provision to have your foreign earned income exlcuded from federal taxation if you meet certain criteria, one of them being out of the country for most of the year. There are also limits to how much you can exclude.

Here is some good information from the IRS:  Figuring the Foreign Earned Income Exclusion

Again, feel free to call and talk to a tax expert and we would be happy to assist you.