It depends. I say that there are no tax remedies because when you roll a pre-taxed plan into a Roth IRA, you do need to pay taxes on the distribution because the Roth can only be funded with after-tax money, no exceptions.
As far as Turbo Tax providing necessary paperwork for you to pay taxes, if this event happened in 2022, Turbo Tax will automatically calculate the taxes owed. So once you enter all of your income, deductions, tax payments from W2's etc, you program will calculate your return from all of these sources and determine if you receive a refund or owe taxes. You may be surprised if you do receive a refund despite all this. Just remember,
just remember, your 1099R income is all inclusive in your tax return and is accounted for in your 2022 tax return. No other paperwork is required.
if this happened in 2023, there are ways to report your estimated tax payments by making quarterly payments. First you might calculate what your taxes will be and then split them up in quarterly payments.
Once you've calculated your quarterly payments.
- You can submit them online through the Electronic Federal Tax Payment System.
- You can also pay using paper forms supplied by the IRS.
- When you file your annual tax return, you'll pay the balance of taxes that weren't covered by your quarterly payments.
Generally, Turbo Tax doesn't automatically generate these forms unless your 2022 return reveals the following:
- You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits. In this case, if you owed more than a $1000 this year on your return.
- You expect your withholding and refundable credits to be less than the smaller of:
- 90% of the tax to be shown on your current year’s tax return, or
- 100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)
@anca
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