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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121341  
Subject: Re: Tax Penalty and Roth IRA Conversion Date: 2/7/2000 5:14 AM
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<< I owe 9K to Uncle Sam for 1999. Out of this 9K, 3K is tax due on Roth IRA conversion (spread over four years).

I also owe $300 tax penalty. Is it possible to claim a waiver on the tax penalty? I was goin to request that Roth IRA conversion as the main reason for underpayment of taxes. What are the possible reasons for which IRA would waive the penalty? >>

There's no special waiver on the Roth income. It would be hard to say that it popped up unexpectedly <g>.

With the numbers you posted, it doesn't look to me like the conversion is the main reason for your balance due. Your total tax is at least $10,001 since you don't meet the 90% safe harbor, so your conversion tax is less than a third of your total tax.

If your income was not uniform throughout the year, you may benefit from the annualized income method of calculating the penalty. See Form 2210.

Phil Marti
Tax Preparer
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