Ask Terry Questions Taxes on a IRA Roth conversion.

Taxes on a IRA Roth conversion.

By Terry Savage on October 14, 2018 | Taxes & Economy

I moved about 75k of my 457B money to a IRA to convert it over 5 years to a Roth IRA. Vanguard holds the money and told me I could request no taxes be withheld. Do I have to pay the tax at conversion or when I file my taxes?And how to pay if before I file?
Thanks

Terry Says

You need to consult your accountant. If you don’t make quarterly estimated payments, you could face a penalty if you haven’t paid in at least 90 percent of last year’s tax liability. The safest thing to do in this situation is to have the custodian (Vanguard) withhold at least 20 percent of the amount of the conversion to pay the taxes that will become due in April following the year of the conversion.

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