Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
>>I converted a traditional IRA to a Roth IRA in mid-December. I am now underwithheld and will not satisfy the safe harbor criteria.<<

This doesn't make sense. The "safe harbor" criteria involves paying at least as much in estimated taxes (and withholding) as 100% (or 108.6% if your income is high enough) of the previous year's tax. Getting more income through an IRA conversion doesn't affect "safe harbor."

If, on the other hand, you only mean that you have now underpaid your estimated taxes where you were ok up to the conversion....

...then quickly figure out how much you need to pay to get back within $1000 of your actual tax liability, get a copy of the Form 1040-ES voucher, write the check and get it postmarked by tomorrow (1/16) midnight.

Or...you can just ignore it until you file your return and pay the penalty at that time. If you fill out Form 2210 reporting your income "as received", you should only owe a penalty on the conversion amount and only for less than 3 months.

Ira
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement