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confused about annual installment method for estimated tax penalty

I did a Roth conversion late in 2009, and made a hefty estimated tax payment in Jan 2010 that should about cover it. Without the Roth conversion, I was nowhere near penalty territory; as a retiree, it was the bulk of my income for

2009. It looks like if I use the "annual income installment method" (aka. Schedule AI of Form 2210), I can avoid paying a penalty, since this big chunk of income was "received" so late in the year. Fine and well.

But, suppose I make a 2010 Roth conversion at the BEGINNING of 2010. Do I need to cover taxes for the conversion in my first 2010 estimated tax payment, or can I spread them across the 4 payments ? If I spread 'em out and then do Schedule AI in 2010, I imagine I'll owe a penalty. But if I use the "regular method", there'll be no record that I "received" that big chunk of my income so early in the year.

Put another way, can I choose to use Schedule AI when it's to my advantage (2009, when I had a big chunk of my income at the end of the year and did not make an estimated-tax payment until then), and choose to NOT use Schedule AI when it would be to my disadvantage (2010, when I'd like to have a big chunk of my income at the beginning of the year but spread the estimated-tax payments across the year) ?

Thanks.

Reply to
JGE
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If you make EQUAL and ON-TIME payments, it will act essentially like withholding on a W-2 or 1099-R--and if you end up owing less than $1,000, you're covered.

Reply to
Brew1

Yes, you can choose. Just remember if using the short method that the

4 payments have to be equal.
Reply to
removeps-groups

Ok, I think this is pretty clear, but just to confirm - the above is true even if the bulk of my income is in the first quarter ?

Thanks much.

Reply to
JGE

This is incorrect. The $1,000 balance due safe harbor applies only to withholding. See Pub 505 and Part I, specifically line 6, of Form

2210.

Phil Marti Clarksburg, MD

Reply to
Phil Marti

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