Are you executing the right Roth Conversion strategy for your retirement? To avoid tax penalties, are you paying the correct amount in taxes on the proper timeline? You can schedule an appointment with one of our Retirement Experts to look at your situation and help you plan for your future. Call us at (920) 544-0576 or go to
Tax planning and making proper tax payments can be one of the most confusing parts of retirement.
The IRS lays out convoluted rules that are difficult to understand, and the responsibility is on you to follow these rules.
A confusing aspect of retirement taxation is adhering to IRS guidelines for making tax payments on Roth Conversions and other taxable events.
In this video today, we are going to explain two critical types of tax payments:
1. Tax Withholdings
2. Estimated Tax Payments
We will show that these tax payments are treated differently in the eyes of the IRS and which payment you should make for your situation.
This video will also explain a powerful IRA Tax Hack that you can use as a sort of “get out of jail free” card if you find yourself in a situation where you messed up making your required tax payments.
0:00 Early Year Roth Conversion Tax Requirements
0:26 The IRS “Pay As You Go” System
0:58 When Must You Pay Taxes on a Roth Conversion?
1:10 Not All Tax Payments are Created Equal
2:36 The Optimal Way to Pay Roth Conversion Taxes
3:42 Using Form 2210 To Avoid a Tax Penalty
4:39 An Incredible IRA Hack For Paying Roth Conversion Taxes
6:22 Don’t Be Afraid of Early Year Conversions!
#IRAHack #RothConversion #TaxPlanning
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Another simple process is to withhold 20% with every distribution from taxable IRAs.
i did a roth conversion last July with an estimated tax of about $5300. do i pay this by Sept 15 or do i split it between 9/15 and 1/15? i am waiting to hear from my accountant.
For a Roth Conversion that is performed on June 1st is the entire tax due as part of the September 15th Estimated Quarterly Tax Payment or can it be split 50/50 between the September 15th and January 15th (of next year) Estimated Quarterly Tax Payments?
Should I take social security at 62 if by 67 I hit the first cliff of the social security tax?
Don’t play games with the IRS. Pay your taxes when they’re due. If you’re audited no one from YouTube will be there to help you. Besides interest and penalties, the IRS can garnish your wages, place liens on your property and incarcerate you. Is it really worth it?
What about safe harbor? Just pay 100%/110% of PY tax in four installments and avoid all underpayment penalties. Pay any excess you owe on 4/15. Why make things difficult?
Excellent explanation of all of the topics you covered, and superb strategy for avoiding an underpayment penalty. I subscribed to your channel. Thank you!
I have used tax estimate payments to pay taxes on Roth conversions. But this trick might get me out of a situation. If you are already retire I wonder if the 60 day roll over is still legal.
I am 45 years old with very little set aside for retirement at this point. I have always been curious about the stock market and have witnessed some people who played the game right and retired early because they used the stock market. When I ask them, most said that they invested very little to start with, but their portfolio grew. I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make decent returns
I’m a little confused. This past March when I did my taxes my accountant said to leave my $2000 refund in until next year. He said this way when I do Roth conversions this year I will not get an underpayment penalty even though I am converting $50,000. Is this correct?
Tax withholding is not time sensitive. So you can do it anytime during the year and it provides the greater flexibility in comparison to the quarterly tax payment, especially if you have salary income. To avoid late payment penalty during the year of the Roth conversion, you can make sure that the current tax year withholding is 100% or 110% of your last year tax liability (safe harbor rule). It is good to know the IRA hack to achieve the tax withholding.
We're about to get a huge IRA conversion "benefit" for anyone with stocks or stock funds in their IRA if the markets keep falling.
Great info: A safety net in case I mess up next year. (I'll make sure to pay quarterly, but it is nice to know I have options).
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Excellent and concise video! Exactly what I needed as I complete Roth conversion. Also, cleared up my tax confusion regarding my Roth conversion of last year. Thank you, Eric!
going through the process now without an accountant or tax advisor so I hope I'm not going to break some IRS rule – guess I'll see. Honestly, this should be made simple for the average citizen to do without necessitating going to high-priced tax advisors.