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Financial Planning / Tax Strategies


Subject:  Re: Implications/penalties of converting to Roth Date:  1/3/2013  5:28 PM
Author:  vkg Number:  117284 of 127613

You will need to file form 2210 to handle uneven income and withholding.

For income in the 4th quarter, federal penalty starts from Jan 15th. If your state has income tax, then you need to check your state's requirements.

This may give you an estimate:
Given the last minute changes in the tax laws, I am not certain that any calculator is correct.

The most likely 2012 federal safe habor would be $1,000 less than your tax liability for 2012.

The penalty is essentially daily interest until paid. I don't know the exact interest rates for 2012. They haven't been extremely high. I believe for an individual in the range of 3%.

Delaying federal payment until April would like cost you between 1 and 2% of the underwithheld amount.
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