Alex The Great
Recycles dryer sheets
I know this topic has been discussed before on this forum. But I'm still not sure how it can be applied to my specific situation, and decided to ask.
Situation is that I plan to work ~6 months during 2023 in particular Jan, Feb, Jun, Jul, Aug, Sep (taking a leave Mar to May) and retire by Oct. As usual tax will be withheld by employer during the time I work, likely more than required. Also I do have some investment income <$20K annually (most are qualified dividends) and taxes are not withheld during the year. The total income would be definitely greater than $150K. Also I plan to do ~$50K Roth conversion in Jan. I always pay 100% tax due in Feb each year, for previous tax year.
Do I have to pay tax on Roth conversion by Apr 2023, to avoid the underpayment penalty? I assumed I still could pay all taxes in Feb 2024 for entire 2023 tax year as I always do but have some doubts. Your advise would be greatly appreciated.
Situation is that I plan to work ~6 months during 2023 in particular Jan, Feb, Jun, Jul, Aug, Sep (taking a leave Mar to May) and retire by Oct. As usual tax will be withheld by employer during the time I work, likely more than required. Also I do have some investment income <$20K annually (most are qualified dividends) and taxes are not withheld during the year. The total income would be definitely greater than $150K. Also I plan to do ~$50K Roth conversion in Jan. I always pay 100% tax due in Feb each year, for previous tax year.
Do I have to pay tax on Roth conversion by Apr 2023, to avoid the underpayment penalty? I assumed I still could pay all taxes in Feb 2024 for entire 2023 tax year as I always do but have some doubts. Your advise would be greatly appreciated.