Roth IRA Questions: Tax Consequences
Monday, June 23rd, 2008Q. If I have a large tax balance due next April because of my Roth IRA conversion, will I be able to avoid the underpayment penalties related to estimated taxes?
A. No. There is no exception to the underpayment penalty just because the balance due was caused by a Roth IRA conversion. There are other exceptions to the underpayment penalty that you might want to review that may allow you to dodge the penalty, but there is no “safe harbor” simply because the underpayment was caused by a Roth IRA conversion.