Quote:
Originally Posted by Buehler445
It won't be a penalty for pulling out of a 401K. The income will be taxable with no withholding against it. Accordingly, he will potentially have exposure to an underpayment penalty.
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Rolls over to Roth
Claims on tax returns
Tax return says you now owe $X
Pays tax bill for $X
Paying estimated taxes is just that, estimated. At the end of the day you have until April 15th of whatever year to true up what you owe or don't owe.
So why not leave the money he is going to pay the tax bill with in an account earning 4% for the year and then pay when he has too?
No one is going to come knocking on his door for any tax payment until April 16th, 2024.