tax penalty

[Stockader]

I have just done a $25,000 IRA to Roth IRA conversion.  I am going to send the IRS $3000 since that will be the amount of tax due.  Last year I did a similar thing and the Turbotax said I owed an underpayment penalty ( although I owed because the ACA Premium Tax Credit was wrong by $1200.  Am I doing something wrong?

[Carl]

$3000 is not enough. That's only 12%. That $25K converted to ROTH in 2018 will be added to your AGI for 2018. So if that will put your AGI over $38,700 for 2018, you'll be in the 22% tax bracket. You'll need to send the IRS another $3000 if this will be your case.

To estimate your AGI take all income from all sources included the ROTH conversion for 2018 and from that total subtract your standard deduction. ($12K if filing single, $24K if filing MFJ). If that total is over $38.700, then $3000 isn't enough to cover your taxes on the ROTH conversion.

[Stockader]

I am married filing jointly, and this brings my income to ~$77K, which I believe is the 12% bracket.