Roth conversions for 401K or IRA

Submitted by Steven Vitullo on Sun, 2022-02-27 15:08

If I convert 10K of IRA or 401K monies to ROTH today, when are the taxes for it due? Would that be April 15th 2023 when we file the taxes for the year or do they have to be paid by some date for the end of the quarter? I am still working and taxes are being taken out but not enough to cover the 10K conversion till the end of 2022. My question is in regard to avoiding any penalties for not paying enough taxes to the IRS and state revenue service for Wisconsin.

Thanks.



Submitted by Alan - IRA critic on Sun, 2022-02-27 17:54

10,000 more taxable income is small enough that you should be able to cover the additional tax liability by increasing your wage withholding by claiming fewer exemptions. There are 10 months left for the increased withholding to add up as you go. That avoids having to pay any quarterly estimated taxes.  

Submitted by Steven Vitullo on Sun, 2022-02-27 18:37

So as long as I increase my withholding so by December 31st I have met my yearly tax liability I should be good then? What would make you need to file a quarterly estimate?  Is that if a much larger conversion was done say 50K or if I was not working and did not have taxes take out of payroll deduction?

Submitted by Alan - IRA critic on Sun, 2022-02-27 18:52

Yes, that is correct. 

Submitted by GiGi on Fri, 2022-06-17 02:18

I am thinking of doing a $20,000 to $30,000 Roth conversion from 401k, 403B or 401A before Dec 31, 2022.  Do I pay taxes at time of conversion (out of savings account) or at the time of filing taxes in 2023.  Don’t want to end up with a penalty.  Thank you.

Submitted by Alan - IRA critic on Fri, 2022-06-17 03:23

If you meet a safe harbor such as paying in quarterly estimates equal to 100%/110% of your 2021 tax liability there will not be a penalty, even if you owe next April. Or if you have pension or other source of withholding to add to between now and year end. 

Submitted by William Tuttle on Fri, 2022-06-17 12:14

  • Are these current or prior employer plans?
  • The tax code and IRS regulations prohibit the in-service rollover of employee deferrals prior to age 59 1/2.
  • The tax code and IRS regulations allow but do not require the in-service rollover of employer contributions and employee after-tax contributions prior to age 59 1/2. Many plans have restrictions on these in-service rollovers.
  • Many plans do not allow separated participants to make discretionary rollovers. A plan can limit distributions/rollovers to lump sum, annuitization and other limited periodic payments.
  • The first thing necessary is to verify with the employer(s) that the rollover would be allowed.

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