Tax Withheld on ROTH Conversion for client under 59/12
We did a ROTH conversion for a client that is 52 years old in 2021 and withheld income tax on the conversion. Is there any remedy to avoid the 10% penalty on the tax withholding?
We did a ROTH conversion for a client that is 52 years old in 2021 and withheld income tax on the conversion. Is there any remedy to avoid the 10% penalty on the tax withholding?
Permalink Submitted by Alan - IRA critic on Mon, 2021-12-06 16:54
If still within 60 days of the TIRA distribution, a check can be written to complete the converted amount and this will eliminate the penalty on the withheld amount as well as making the conversion equal to the total distribution that will be reported on the 1099R. Be sure the deposit is reported as a conversion. There will be two conversion dates. If over 60 days has passed the penalty can only be waived if client qualifies for a different penalty exception other than being 59.5.