What happens if you over withhold taxes from a Roth conversion account?
After looking at last years tax return, my FA said to withhold 10 % instead of 12 % ( our tax bracket). He said if anything we’d only owe a little bit in April if at all. I asked him wouldn’t it all rectify itself anyway when doing the taxes and if we overpaid we’d get reimbursed excess taxes paid overall when we filed? He said no.
I don’t get it. Can anyone else chime in on this?
( And yes- we will be paying the taxes out of the conversion account even though we have cash to pay them because that’s the way we want to do it so we’ve already decided on that).
After looking at last years tax return, my FA said to withhold 10 % instead of 12 % ( our tax bracket). He said if anything we’d only owe a little bit in April if at all. I asked him wouldn’t it all rectify itself anyway when doing the taxes and if we overpaid we’d get reimbursed excess taxes paid overall when we filed? He said no.
I don’t get it. Can anyone else chime in on this?
( And yes- we will be paying the taxes out of the conversion account even though we have cash to pay them because that’s the way we want to do it so we’ve already decided on that).