Author Topic: Do you need to file form 1040 ES if paying online?  (Read 2207 times)

stahleyp

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Do you need to file form 1040 ES if paying online?
« on: December 06, 2019, 01:26:47 PM »
Hey guys,

So I'm looking to do a possible roth conversion. I understand that if I pay 110% of 2018 taxes I should be good or 90% of this years estimated. Is that right?

Also, if I pay this online, do I need to file Form 1040 ES? Thanks!
Paul


mjm

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Re: Do you need to file form 1040 ES if paying online?
« Reply #1 on: December 06, 2019, 03:20:30 PM »
a little off this subject, but if you do pay your taxes online as I do may consider Alliant Credit Union Signature visa CC as for first year would get 1.1% back on federal taxes (3%- 1.89%).  Not small change for all the stock savvy people on this site( self not included). there are some requirements to join, but they helped me bypass that as I did not meet them either.

Visa Signature
2.5% cash back on all purchases (3.0% in the first year)
No foreign transaction fee
$99.00 annual fee (waived in the first year)

LC

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Re: Do you need to file form 1040 ES if paying online?
« Reply #2 on: December 06, 2019, 05:29:24 PM »
Hey guys,

So I'm looking to do a possible roth conversion. I understand that if I pay 110% of 2018 taxes I should be good or 90% of this years estimated. Is that right?

Also, if I pay this online, do I need to file Form 1040 ES? Thanks!
Not sure about the 1040ES but where are you getting the +/- 10% from?

My understanding is that all non-taxed cash from the traditional IRA (i.e. pre-tax contributions you made, and any gains within the traditional roth) are then identified as taxable income in the year you perform the conversion.

Let's say in 2019 you earned $100 but contributed $5 pre-tax to your traditional IRA. So in 2019 your taxable income is $95.

And let's say that $5 grew to $6 within the traditional IRA.

In 2020, you convert to a roth IRA, and again make $100. Your 2020 taxable income will be $106, and you pay taxes normally on that income amount.

Note: In this example, you would pay an additional 10% on the $6 if you do not make the conversion within 60 days of closing the traditional IRA.

Another aside: I often do this when moving homes - If I need up-front cash as a down payment, I can withdraw it from my Roth IRA for the down-payment on the new purchase. Then when the old house sells, I take the exact same amount and deposit it back into the Roth IRA (within 60 days, and you can only do this once per 12 months!).
« Last Edit: December 06, 2019, 05:36:53 PM by LC »
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stahleyp

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Re: Do you need to file form 1040 ES if paying online?
« Reply #3 on: December 07, 2019, 08:00:04 AM »
mjm,

I'm aware of that card but thanks. That was actually my plan which is why I was looking at paying online. haha

lc,

I don't think I was clear in my intentions (sorry!). I'm trying to avoid the underpayment penalty. I have money in a 401k that I'm looking to convert into Roth money. Since it'll be a decent amount (for my middling wealth anyway), I'm trying to make sure I don't get hit with the penalty.
Paul

mjs111

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Re: Do you need to file form 1040 ES if paying online?
« Reply #4 on: December 07, 2019, 10:48:36 AM »
Iíve paid quarterly estimated taxes for roughly the last 8 years, both federal and California state. Iíve never filed a separate 1040 ES (or 540 ES for California). As I I understand it the online payment is the digital form of the 1040 ES.

Mike

fareastwarriors

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Re: Do you need to file form 1040 ES if paying online?
« Reply #5 on: December 07, 2019, 12:07:23 PM »
I only use 1040 ES when I'm mailing a check, never for online.

stahleyp

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Re: Do you need to file form 1040 ES if paying online?
« Reply #6 on: December 07, 2019, 02:49:18 PM »
That's what I needed. Thanks guys! :)
Paul