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Financial Planning / Foolish 401(k)s


Subject:  Re: question about roth conversion Date:  12/30/2019  12:11 PM
Author:  aj485 Number:  26278 of 26341

Could you please expand on that? Does a "safe harbor" include having more withheld than you paid in taxes the previous year?

Yes, for those whose AGI is less than $150k, withholdings of at least the prior year's tax liability is one safe harbor to avoid underpayment penalties. For those whose prior year AGI was more than $150k, a safe harbor would be having at least 110% of the prior year's tax liability withheld. There are other safe harbors that are documented in IRS Pub 505

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