"Ron Peterson" wrote:

- quote -

If you've already paid enough ES payments to cover 90% of your 2008 tax you
can skip the January installment. Or you can make the January installment
just enough to get you to the 90%. IOW, all installments don't have to be
equal.

See IRS Publication 505.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Nov 2, 11:15*pm, "Phil Marti" <prm20...[at]verizon.net> wrote:
- quote -

Oh, s**t. At least I will get a large refund for this year.

--
Ron

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Ron Peterson" wrote:

- quote -

No, it won't. You always have the option of basing this year's ES payments
on this year's income.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Nov 2, 1:42*pm, Sam <neverchecke...[at]hotmail.com> wrote:

- quote -

You may want to spread the conversion over several years to keep out
of the higher tax brackets and AMT.

A full conversion may also cause you to pay higher estimated taxes in
the following year.

--
Ron

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article
<b1641f78-1eb4-47b0-bf7e-19ce321227af[at]n33g2000pri.googlegroups.com> ,
Sam <neverchecked40[at]hotmail.com> wrote:

- quote -

I just got my renewal mail from Intuit this weekend, and it says the
software will be available in mid-to-late November.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Thanks for the responses guys, your comments are very beneficial.

I did not realize that in 2010 I would be able to spread the tax
expense over two years, that is something I will need to consider.

I also have a follow up question, in order to understand how this is
going to impact my taxes this year (I have a few other new things that
are also affecting my taxes this year vs last year) I would like to
estimate my tax prior to doing the conversion. Ideally I could do this
by using TurboTax but the 2008 version has not been released yet, does
anyone have an estimate of when TurboTax 2008 will be released?

Or alternatively does anyone have a sugesstion for how I could
estimate my taxes for 2008? Filling out the forms manually is probably
not a good option for me.


Thanks,

Sam

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Sam" <neverchecked40[at]hotmail.com> wrote in message
news:87241379-4584-4260-836d-28ba8ca5fde5[at]u57g2000hsf.googlegroups.com...
- quote -

Hopefully, you have also considered alternate times to do this - like 2010,
where one gets a 2-year spread of the converted amount.

- quote -

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Arthur Kamlet wrote:
- quote -

You do not have to convert 100% of your total Trad. IRA balance(s).
Usually you will only want to convert an amount that takes you up to the
top of your current marginal tax bracket, or in your case, only an
amount that you *can* afford to pay tax on for this year.

If you adopt this approach, be sure to make each conversion into a
"separate" Roth IRA account for each asset, for example, $15K into
shares of XYZ mutual fund. Custodians will often keep Roth IRA
investments under separate account numbers for this purpose. Then, in
the uncommon case you want to "undo" (recharacterize) your conversion
within the time limit allowed, it will go much more easily.

- quote -

Value on the date of conversion, and only on the amount you convert.

- quote -

Not so bad if done within the parameters above. But I agree, *planning*
to owe the IRS more than you can pay is a bad idea.

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <87241379-4584-4260-836d-28ba8ca5fde5[at]u57g2000hsf.googlegroups.com> ,
Sam <neverchecked40[at]hotmail.com> wrote:
- quote -


If you are in generally good terms with the IRS, and owe under $25,000
you can apply for an installment plan. That lets you pay what you owe
plus the penalties and interest, over a period of time measured often in
years. The application fee for this installment agreement is lower
if you authorize them to withdraw a fixed amount each month from
your savings or checking account.


If you cannot come up with the money in any reasonable time -- and
you have no business doing what you are planning if so -- there is
a possibility to enter into an Offer in Compromise where the IRS
investigates and concludes they can't get all the balance from you
in a reasonable time. Since you will have a good chunk in your
IRA this is not really applicable to you.


See

http://www.irs.gov/taxtopics/tc202.html

http://www.irs.gov/pub/irs-drop/n-06-68.pdf



- quote -


Yes, see above.


- quote -


The taxable amount converted is added to your ordinary income, and
the income tax is based on your marginal tax rate. If you had made
nondeductible contributions to your IRA, and you would have had to
fill out a form 8606 if you did, then you use that form to determine
how much of the amount distributed and converted is taxable income.


You didn't ask, but I have some suspicions that this is not the best
of all financial planning methods.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I am considering converting my traditional IRA to a Roth IRA and I
have gone through several calculators all of which return different
numbers but all of which are in agreement that I would benefit by
doing this as long as I pay the required tax out of pocket (not from
the traditional ira).

So I am considering to do this now but I will not have the cash on
hand to pay the full tax bill.

Will the IRS allow a person to make monthly payments on their tax
bill?
Will there be any penalties or finance charges to do this?
Can someone point me to the appropriate IRS publication where I can
learn more?

And just one more question just to make sure, the tax due on the
conversion is calculated on the current account balance, is that
correct?


Thanks,

Sam

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >