Roth Conversion tax penalties

TAS Member Newcomer
edited January 15 in Retirement Income

If I owed no taxes in 2022 for IRS and California, can I pay a nominal amount when I convert my IRA to Roth and pay the rest when I file my taxes without penalty for 2023 tax year?



  • AlexO
    AlexO FreeTaxUSA Agent

    Hello, Tax!

    That is a great question!

    To avoid an underpayment penalty, you must pay at least 90% of the tax shown on the current year's return or 100% of the tax shown on the prior year, whichever is less. Thus, if you had no tax on your prior year's return, you won't owe an underpayment penalty on this year's return. For more information, see the link below:

    If you are planning on paying an amount in advance of filing your return, be sure you pay this as an estimated tax payment. Do not elect to have tax withheld from the conversion. If you have tax withheld, this amount is deemed as not being converted and would thus be subject to an early withdrawal penalty.