HealthyFuture
Recycles dryer sheets
- Joined
- May 12, 2021
- Messages
- 101
All, I have attempted to understand this by reading instructions and definitions, but am really struggling and would appreciate some guidance. Very basic questions for some of you I’m sure.
We are trying to pay our estimated taxes before the deadline, but are not certain how capital gains and dividends will show up when our tax forms are issued by the retirement company.
Oct/Dec 2022 were our first Roth conversions, and they were sizable ($120K). I believe that full amount of the conversion is included on 1040 Line 4b. What isn’t clear is whether we ALSO pay tax on whatever capital gains or dividends might have come along within that conversion. In other words, do we get taxed twice (in a manner of speaking) — first on the income itself (the dollars withdrawn from the 403b to rollover into the Roth), and second if those monies included dividends or capital gains?
If we have to pay additional taxes on dividends and capital gains, I have no clue how to estimate those that were specific to the conversion before we get our tax forms. (We’ve held the investments for years.) I’m fine for year one to pay more tax than we owe and get a refund; I really don’t want to pay a penalty unless it’s a paltry amount, but feel pretty clueless on how to guess what our actual adjusted gross income is.
We are trying to pay our estimated taxes before the deadline, but are not certain how capital gains and dividends will show up when our tax forms are issued by the retirement company.
Oct/Dec 2022 were our first Roth conversions, and they were sizable ($120K). I believe that full amount of the conversion is included on 1040 Line 4b. What isn’t clear is whether we ALSO pay tax on whatever capital gains or dividends might have come along within that conversion. In other words, do we get taxed twice (in a manner of speaking) — first on the income itself (the dollars withdrawn from the 403b to rollover into the Roth), and second if those monies included dividends or capital gains?
If we have to pay additional taxes on dividends and capital gains, I have no clue how to estimate those that were specific to the conversion before we get our tax forms. (We’ve held the investments for years.) I’m fine for year one to pay more tax than we owe and get a refund; I really don’t want to pay a penalty unless it’s a paltry amount, but feel pretty clueless on how to guess what our actual adjusted gross income is.
