When exactly are ROTH Conv. Taxes Due
I did Roth Conversion in June 2010. I want to spread payments between tax years 2011 and 2012. Does this mean my 2011 conversion taxes are due April 2012 and the 2012 taxes due April 2013?
I did Roth Conversion in June 2010. I want to spread payments between tax years 2011 and 2012. Does this mean my 2011 conversion taxes are due April 2012 and the 2012 taxes due April 2013?
Permalink Submitted by Alan Spross on Tue, 2010-10-12 19:50
Yes, those are the tax due dates for your 2010 Roth conversions when you defer the income to 2011 and 2012.
However, in order to avoid an underpayment penalty, you must either pay quarterly estimates or increase your withholding for 2011 and 2012 and not wait to pay the entire bill in the following April. There are “safe harbors” to meet which will guarantee that you will not be penalized no matter how much you owe in April. You can either pay 100% of your full 2010 tax liability (110% for income over 150k) or 90% of the current 2011 year tax liability to avoid penalties for 2011.