Come tax time you would owe another 25% taxes on the second $25k you withdrew to cover the first taxes. So I think you would need to actually withdraw $33,333, pay the $8333 of taxes on that, then use the remaining $25,000 to pay the taxes on the first $75k conversion. Aka 100% of $33,333.
Instead of what you propose, I would propose two steps and transactions. First you convert $75K from IRA to Roth. Then you do a distribution from your IRA of $25K BUT have 100% withheld for taxes. This way the taxes were paid timely since were a withholding and you don’t need to worry about estimated tax paym3nts.
Note i implicitly assumed op was a) over 59.5 ans2) had $25k of CONTRIBUTIONS in the Royh
**EDIT** whoops that would allow for the full $100,000 conversion to stay in roth ***
note: fidelity only lets me send 99% to taxes on an IRA withdrawal, (I think I've done 100% on the phone)
Statistics: Posted by Late as always — Fri Sep 27, 2024 8:34 pm — Replies 23 — Views 1097