So this is Vanguard. Can they withhold some of the rolloever to pay the taxes? I just don't want to mess up some of the leg work here as I do my own taxes in Turbotax each year.
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This Vanguard article indicates that while you can withhold some of the rollover, it would be better to pay an estimated tax out of a nonretirement source like cash savings in order to keep the Roth account at its maximum: https://investor.vanguard.com/invest...rom-an-advisor

So rather than withhold 10%, make a quarterly estimate payment of $2k at the time of the rollover.
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They should. But I've never done it so I can't verify 100%, but it is a common thing.
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Man up! Roll this shit over and prepare to pay your taxes out of a taxable account when you file. WTF would you mess with filing an estimate when in the end you're going to pay whatever it is you have to pay and you have until then to pay it?
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Ah, yeah, that makes some sense the IRS would care how the funding is done.

I think you just print a voucher and mail a check and there should be a place on TurboTax to enter payments.

The other option is to withhold an additional amount on your W-2.
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Because you'll pay a penalty.
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Why would he pay a penalty?
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Underpayment Penalties exist.

https://www.investopedia.com/terms/u...ets%20annually.
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If he does a rollover today he has 60 days to put it into a Roth and he has until April 15th, 2024 to pay the taxes on it.

What am I missing?
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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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Follow me here....

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.
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Buehler's right -- if the tax return says you now owe $X, and you have not paid 90% (I think that's it, in general) of $X by end of that tax year, you owe an underpayment penalty. If we didn't have that rule, then most people wouldn't want to withhold anything from their paychecks and all our self-employed people would wait to the last second to pay their taxes, thus depriving the IRS of what's rightfully theirs for nearly a year. ( :-) )
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I am not sure I agree with that. My Wife does IRA administration, I will hit her up on that but as far as I know, you have 60 days to get the money rolled over and any tax you owe can get paid when you file your taxes. Just like any other time your tax return says you owe. Maybe it's this 90% thing you are talking about....
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Yes, they are two separate concerns. One is, 'I don't legally need to withhold taxes from the converted IRA.' The second concern is, 'but maybe I want to do something to avoid the underpayment penalty focusing on ALL of my income at the end of my tax year, so let me throw in an estimated tax payment to be safe'
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One exemption to paying penalties is that if you have paid at least your tax liability from last year. If your total tax liability from last year was $5k, for instance, as long as you had paid $5k withholding this year there would be no penalty for under withholding. I use this exemption often if I have unexpected income or capital gains.
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