How do I avoid Underpayment Penalty when I did a large IRA to Roth IRA conversion in December and paid the estimated taxes right away?

Forum|Forum|11 months ago
April 10, 2025
1 reply
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I did the conversion in mid December and paid the estimated taxes the same day but i'm still being hit with a $185 penalty because I apparently didn't pay this across 4 quarters through the year when I didn't know I would do this conversion. This can't be right?

VolvoGirl

Employee

You might be able to eliminate it or at least reduce it. You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you. It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

If you have the desktop program you can switch to Forms Mode (click forms in the upper right (left for Mac)) and open the 2210 form. If the 2210 doesn't show up in the left column, click on Open Forms at the top of the left column. Type 2210 in the search box and open the 2210 form. Check box C if you want to let the IRS calculate it.