My Retirement Blog

If you convert a Traditional IRA into a Roth IRA this year, remember that the balance you convert will be considered income and so you may be penalized for underpaying your taxes. There are several safe harbor conditions that would save you from the underpayment penalty (for example, if you did not owe taxes last year, then you would not be subject to the underpayment penalty this year) so check with a tax professional to ensure you are adequately paying your taxes to avoid this penalty.

There is no safe harbor simply because the underpayment was the result of a Roth IRA conversion so be sure to review it.

• Tax Underpayment Penalty on Roth IRA Conversions
• Contributing to a Non-Deductible Traditional IRA
• Unconvert A Roth IRA Conversion
• Contribution to Non-Deductible Traditional IRA
• 2010 Traditional IRA Conversion