form 8606

[kongmen]

I'm trying to do a Roth conversion this year in the month of August and when I look at form 8606 it says the year 2021. Can I use form 8606 for a conversion in August of 2022?



I will be sending the funds for the taxes along with the form as soon as I confirm the conversion has been completed this month so as to pay the taxes in the same quarter as the conversion.



Thanks for any replies.

 

[Gumby]

I'm trying to do a Roth conversion this year in the month of August and when I look at form 8606 it says the year 2021. Can I use form 8606 for a conversion in August of 2022?



I will be sending the funds for the taxes along with the form as soon as I confirm the conversion has been completed this month so as to pay the taxes in the same quarter as the conversion.



Thanks for any replies.

I could be misunderstanding something important, but to my knowledge, the Form 8606 will be filed when you file your taxes next April. I'm sure it will be updated by then.

 

[Alan]

I could be misunderstanding something important, but to my knowledge, the Form 8606 will be filed when you file your taxes next April. I'm sure it will be updated by then.

That is my understanding. I have done many Roth conversions including this year. I won’t be completing the 8606 until I file my taxes next year.

You can’t complete the 8606 now as you don’t know what the balance of your IRAs will be at the end of this year which is one of the questions on the 8606.

 

[MarieIG]

IIRC - I filed that every year with my tax return to establish the cost basis for my non-deductible IRA - so that when I did the conversion, my post-tax money would be documented, and I would not be re-taxed on that money.

If Pb4uski says differently, I am overruled, i.e. what he says goes . . .

 

[cathy63]

I'm trying to do a Roth conversion this year in the month of August and when I look at form 8606 it says the year 2021. Can I use form 8606 for a conversion in August of 2022?

I will be sending the funds for the taxes along with the form as soon as I confirm the conversion has been completed this month so as to pay the taxes in the same quarter as the conversion.

Thanks for any replies.

You do not file form 8606 when you pay estimated taxes, which is what you'll be doing this quarter. You file form 1040-ES with your estimated tax payment if you write a check, or you can pay online and enter the same information that's on the 1040-ES when you make the payment.

The actual tax due as a result of the Roth Conversion will not be final until you do your 2022 tax return next year. That's when you'll fill out and send in form 8606. Until then, all you can do is estimate the tax and pay it.

 

[kongmen]

Thanks for the replies.


To clarify I mistakenly thought I had to submit a tax form
When I pay the estimated taxes due on the conversion.


I'd prefer to pay online straight

From Sycrony...is that possible?


How do I inform the IRS of why I'm

Sending them money if I don't send a
Form?

 

[cathy63]

Thanks for the replies.


To clarify I mistakenly thought I had to submit a tax form
When I pay the estimated taxes due on the conversion.


I'd prefer to pay online straight

From Sycrony...is that possible?


How do I inform the IRS of why I'm

Sending them money if I don't send a
Form?

You have to ask Synchrony if it's possible to do withholding on a Roth conversion. Some banks will do it, some won't. If they do it, then they will tell the IRS that it's an income tax payment for your social security number when they send it in.

That said, it's usually a bad idea to have withholding on a Roth conversion. It's better to pay the estimated taxes out of separate funds that you already have in an after-tax account if you possibly can. That way you have more money in your Roth growing tax free in the years to come.

There's nothing special about tax on a Roth conversion, it's just plain old income tax. Form 8606 is not used to figure the tax, it's only used to figure the taxable portion of the conversion. Once you know how much of the money you converted is taxable, you enter that number on your 1040 and it just gets included in income before the tax is calculated. On your 1040, you also enter the amount of estimated tax you paid.

 

[Alan]

Thanks for the replies.


To clarify I mistakenly thought I had to submit a tax form
When I pay the estimated taxes due on the conversion.


I'd prefer to pay online straight

From Sycrony...is that possible?


How do I inform the IRS of why I'm

Sending them money if I don't send a
Form?

A couple of ways to pay online would be to create an IRS account, or register with EFTPS, which is what I have used for many years. When making a payment through EFTPS I indicate that it is an estimated tax payment using form 1040-ES

https://www.irs.gov/payments/eftps-the-electronic-federal-tax-payment-system

 

[kongmen]

I think I'm going to register with EFTPS. Once registered will I be able to transfer the estimated tax amount to them from my Sycrony account?

 

[Alan]

I think I'm going to register with EFTPS. Once registered will I be able to transfer the estimated tax amount to them from my Sycrony account?

I have no idea what a Sycrony account is I'm afraid. EFTPS will ask for a routing number for the bank and your account number, also if it is a checking or savings account. If your Sycrony account is that type of account then you are good to go.

I use my normal checking account to send money with EFTPS

 

[Gumby]

I just write checks for my estimated taxes and mail them in (certified) with a Form 1040-ES. It's pretty darned easy.

 

[Alan]

I just write checks for my estimated taxes and mail them in (certified) with a Form 1040-ES. It's pretty darned easy.

That's expensive for me from England and involves interacting with real people at the Post Office (SHOCK).

I've done the EFTPS for many years and there are no forms to fill out, just a dropdown to select 1040-ES, and a couple of clicks and that's it. (It remembers my bank details as well as my personal details so that is also a simple drop down).

 

[Gumby]

That's expensive for me from England and involves interacting with real people at the Post Office (SHOCK).

I've done the EFTPS for many years and there are no forms to fill out, just a dropdown to select 1040-ES, and a couple of clicks and that's it. (It remembers my bank details as well as my personal details so that is also a simple drop down).

I actually tried to sign up with EFTPS, but it rejected me. Twice.

 

[Alan]

I actually tried to sign up with EFTPS, but it rejected me. Twice.

Wow.

I'm currently doing the certified mail thing with my Louisiana State taxes. I received a letter from them saying I owed a $22 penalty for late filing. I hadn't realized that their file-by date for overseas taxpayers is different to the IRS in that it is May 15th not June 15th and I e-filed late May once I had e-filed my Federal return, so mea culpa.

The problem is that the USPS is incredibly slow and I have been through this once before with them. Their notice is dated July 25 and I received it August 2nd, which isn't bad by USPS standards, and I have 30 days to pay. Whenever I send a letter using certified mail I use the tracking number provided and it goes from my local post office and arrives in NYC within 48 hours then I start getting email updates from USPS as it bounces around for 2 to 4 weeks so that by the time they receive my check I will have received a more demanding notice for the $22. This year I have decided to not respond to their 2nd notice unless the check I sent does not clear eventually.

I have made a note to myself for next year to file for an extension in April with enough money sent so that they will owe me a small refund.

These things are sent to try our patience - did I ever tell you about California coming after our son for taxes? This was because when he left his company to move to England in 2017, a Texas Bank, he gave them his sister's address to send his W2 the following year since an overseas address was never going to work with them. California then needed him to either file a tax return or prove that he wasn't a tax resident that year or that the company sending him the W2 was not a California company.

 

[kongmen]

That's expensive for me from England and involves interacting with real people at the Post Office (SHOCK).

I've done the EFTPS for many years and there are no forms to fill out, just a dropdown to select 1040-ES, and a couple of clicks and that's it. (It remembers my bank details as well as my personal details so that is also a simple drop down).

I have begun the process of obtaining an account with EFTPS. I'm awaiting the pin number and password info which is on it's way in the mail.



When I go to pay the taxes after the Roth conversion is complete this month I will be able to use a drop down menu on the EFTPS site for the 1040ES form?

 

[SecondCor521]

I have no idea what a Sycrony account is I'm afraid. EFTPS will ask for a routing number for the bank and your account number, also if it is a checking or savings account. If your Sycrony account is that type of account then you are good to go.

I use my normal checking account to send money with EFTPS

OP is probably talking about Synchrony Bank, which is just an online bank which offers CDs, savings accounts, and credit cards.

https://www.synchronybank.com/

I don't know if Synchrony Bank provides IRAs. I doubt it, but they might. I think OP was just wanting to pay the IRS from their bank account, not as part of their Roth conversion, but @cathy63's cautions about that are still obviously a good idea.

 

[Alan]

I have begun the process of obtaining an account with EFTPS. I'm awaiting the pin number and password info which is on it's way in the mail.



When I go to pay the taxes after the Roth conversion is complete this month I will be able to use a drop down menu on the EFTPS site for the 1040ES form?

That’s correct, when making a payment select 1040 and then under forms select 1040ES. If you have difficulty finding it I can make a couple of screen shots from my laptop.

 

[kongmen]

OP is probably talking about Synchrony Bank, which is just an online bank which offers CDs, savings accounts, and credit cards.

https://www.synchronybank.com/

I don't know if Synchrony Bank provides IRAs. I doubt it, but they might. I think OP was just wanting to pay the IRS from their bank account, not as part of their Roth conversion, but @cathy63's cautions about that are still obviously a good idea.

Yes I was talking about the online bank called Sycrony...thank you.

 

[kongmen]

That’s correct, when making a payment select 1040 and then under forms select 1040ES. If you have difficulty finding it I can make a couple of screen shots from my laptop.

Thank you much appreciated!

 

[MarieIG]

https://www.irs.gov/pub/irs-pdf/f1040es.pdf

The form is on page 11.

 

[Alan]

https://www.irs.gov/pub/irs-pdf/f1040es.pdf

The form is on page 11.

Just to be clear, when using EFTPS you select 1040ES from the drop down menu but you never actually see it or have to complete any fields. You are simply indicating that this is an estimated tax payment. You can also schedule future payments which you can later cancel if needed.

 

[kongmen]

Just to be clear, when using EFTPS you select 1040ES from the drop down menu but you never actually see it or have to complete any fields. You are simply indicating that this is an estimated tax payment. You can also schedule future payments which you can later cancel if needed.

Thank you that's very helpful.