I just converted about $27,000 to my ROTH. Earlier this year I donated about half that to my charitable gift fund.
In 2021 I was on ACA an will have kept my income low for that, but am now on Medicare so my income will jump due to ROTH conversions.
I think I ended up overshooting my $0 federal tax amount due to some planning mistakes, but I probably will still have a pretty low 2021 tax bill.
At first I was going to ask if the charitable donation would be used to offset the quarterly tax payment or if I would have to make the full estimated payment and then apply the contribution on my return and get a refund.
But now I am thinking that the simplest way to handle things would be to just make one estimated payment in April of 100% of the 2021 tax bill. That should be relatively small and I don't care about missing out on the interest by paying early.
Am I correct that if I pay 100% of 2021 as estimated, I can ROTH convert to my heart's content and just pay up when I file the 2022 taxes?
Here is a quote from some H&R Block site that Google found:
"The IRS will not charge you an underpayment penalty if: You pay at least 90% of the tax you owe for the current year, or 100% of the tax you owed for the previous tax year, or. You owe less than $1,000 in tax after subtracting withholdings and credits."
Thanks.
In 2021 I was on ACA an will have kept my income low for that, but am now on Medicare so my income will jump due to ROTH conversions.
I think I ended up overshooting my $0 federal tax amount due to some planning mistakes, but I probably will still have a pretty low 2021 tax bill.
At first I was going to ask if the charitable donation would be used to offset the quarterly tax payment or if I would have to make the full estimated payment and then apply the contribution on my return and get a refund.
But now I am thinking that the simplest way to handle things would be to just make one estimated payment in April of 100% of the 2021 tax bill. That should be relatively small and I don't care about missing out on the interest by paying early.
Am I correct that if I pay 100% of 2021 as estimated, I can ROTH convert to my heart's content and just pay up when I file the 2022 taxes?
Here is a quote from some H&R Block site that Google found:
"The IRS will not charge you an underpayment penalty if: You pay at least 90% of the tax you owe for the current year, or 100% of the tax you owed for the previous tax year, or. You owe less than $1,000 in tax after subtracting withholdings and credits."
Thanks.
