IRA Conversion to Roth IRA

[mjf06241972]

Hello,

If someone wants to do an IRA Conversion to Roth IRA, does that mean the taxes are paid at time of conversion for the IRA?  What federal taxes are withheld and I would assume normal state withholding would apply?  Thank you.

[Larry Starr]

11 hours ago, mjf06241972 said:

Hello,

If someone wants to do an IRA Conversion to Roth IRA, does that mean the taxes are paid at time of conversion for the IRA?  What federal taxes are withheld and I would assume normal state withholding would apply?  Thank you.

No withholding on IRA conversion to Roth IRA.  Reported as taxable income by the IRA custodian via 1099R.  Taxes paid as normal (with the timely filed return). IRA owner may need to make estimated payments to avoid penalties on both Federal and state income taxes, but the standard rules for having to make estimated tax payments apply.

[JOH]

A client can choose to have taxes withheld at the time of the IRA Conversion, it's the client's choice.  If they do elect to have withholding, then applicable state tax withholding rules apply.