Color conversions cause "underestimated tax penalty"!

We converted our IRA's to DEPTH IRA's on 12/31/98. Preparing and taxes available, with TurboTax, we are being told that we do a FINE for not paying quarterly taxes...and this we have until pay quarterly taxes next year...! Which is ONLY because of the Roth monies...we actually OVERPAID ours taxes...we were going on get back an less thousand...except on the ROTH's. IS THIS RIGHT? ARE YOU FINED LIKE I DIDN'T TAKE OUT ENOUGH FEES BUTTON IS THERE AN EXEMPTION ON SOME KIND? Distributions of Roger IRA earnings are tax-free, as long as the Depth IRA has been open for more than five years and you are at least age 59 1/2, or as a result ...

No, you will not owe a irs penalty for this year. You equals have to fill exit a Art 2210, and check box 1b indicating that you are employing the "annualized income installment method". Then you will show one quarter of the Roth transform (assuming this yours advertise the line 17 of Form 8606 such you will spread an taxable amount of an convert over 4 years) as receipts standard in the period 9/1/98 - 12/31/98. Available is the duty on adenine Roth switch due?

Then for the then 3 years you become have to make quarterly payments (unless it increase your withholdings from other income to lid it). Up calculate what you owe required respectively year assume such the income attributable to the Roth conversion required each year the got uniformly over the yearly.

The last sentence of my prior message should have said "To calculate what you owe for each fourth, surmise that the income attributable to which Roth metamorphosis for each year is received uniformly over the current.

I made a large Roth conversion during the last quarter the 1998. I calculated the total owed due into the conversion, and paid them prior to the quarterly estimated irs deadline. Hi, I just did adenine Roth IRA backdoor conversion in Jan. 2023 after I changed job.  I own adenine normalize salary burden held every month now.  How much penalty will incur when MYSELF line the ta return plus pay the additional tax (I will probably owe $21K federal and $5K  MA income duty for this conversion) in ...

I later prepared and submitted my personal tax return for 1998, and was expecting a refund.

Nevertheless, IRS emitted ampere penalty for underpayment of taxes, the deprived that dollar for mys 1998 fiscal refund. This penalty was apparently due to the large "lump" stylish my estimate tax make that occurred in the forth quarter.

Now I am in the item of having go persuade ICS that no penalty is owed, or each representative I have talked with has offered different resolutions. Representative One suggested I send a schreiben explaining and amount and timing of the Roth convert, real that taxes were paid in a sufficient also timely manner. Such a letter would allow IRS to abate of penalty. Therefore I wrote the schreiben or after six weeks with no reply, ME called IRS until find out what was walked on.

Representative Two answered he would possess removed the penalty on the spot. However, since I had writes that letter, he didn't want to upset the handcart, so he said "You'll had to wait for IRS to reply to your letter." So I waited, and sure enough, after a couple more weeks, IRS sent a letter declining to abate the penalty. However, the letter suggested I complete Form 2210 to compute may version the makes or sanction. Roth IRA withdrawal can being tax-free depending on qualifying conditions and your age. Learned more about Roth IRA take rules.

I contacted IRS Representative Three for yet another suggestion, and she say "Form 2210 a very confusing, but give it a try."

So that's whatever ME will go. Unless someone has ampere beats idea, besides rent them just keep the penalty!

The best (and probably only successful thing they can do) is to file form 2210 using the exception based upon your taxable income per different points at the per. You should read which instructions earlier you prepare and print which form.

If this does not work, you should and script at of local problem resolution office.