I did a ROTH conversion in last quarter, paid estimated tax before tax was due. How do I enter this so I do not owe a tax penalty?

[haynes7199]

I did an IRA conversion in December 2024 of $100,000 and paid estimated tax of $22,000 in January 2025, before tax was due but TT is saying that I owe a tax penalty.

[baldietax · Accepted solution]

you'll need to go thru the Annualized Income (AI) Method on Form 2210 to show the uneven tax liability in Q4 and associated estimated tax lining up with that.  Under "Other Tax Situations" then "Underpayment Penalties" you should get the option to adopt this method.  You'll need to calculate and provide YTD numbers for AGI etc for 3/31, 5/31 and 8/31.  Once you get done I would suggest going through the various 2210 forms generated under Forms view or in the PDF of your return with "all forms and worksheets".  There will be a worksheet which shows exactly how any residual penalty is calculated by quarter.

This is based on desktop version not sure about online but should have similar process.

[haynes7199]

Thank You!