Does Turbotax complete form 2210. I will be doing a Roth Conversion and paying taxes from a cash bank account. I want to show IRS that this tax payment was made for the Roth Conversion (both to be done in December. FYI: I dont want to have the taxes withheld from the IRA transfer custodian.
Yes Turbo Tax has form 2210. If your return shows an underpayment penalty you might be able to eliminate it or at least reduce it. You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you. It's form 2210.
It's under
Federal or Personal (for Home & Business Desktop)
Other Tax Situations
Additional Tax Payments
Underpayment Penalties - Click the Start or update button
By default, income is treated as having been received evenly throughout the year but estimated tax payments are credited when paid. This means that you might have to annualize income on Schedule AI of Form 2210 to minimize or eliminate an underpayment penalty for earlier tax quarters. VolvoGirl mentioned that TurboTax supports doing this through the questions that TurboTax asks.
Hello,
I went to the Forms View on Turbo Tax and found Form 2210. I checked box C in Part II. Turbo tax then filled in Part III (the penalty computation) for me. It also filled in the Underpayment Penalty Worksheet. Since this has been filled in by turbo tax, do I need to go to through and answer the questions in the Other Tax Situation Tab - underpayment penalties section? Figuring out these answers would be tedious, and I would like to assume that the numbers turbo tax used would be accurate. Please advise. Thank you!
Usually not necessary. TT does a good job in calculating the underpayment tax penalties whenever not enough tax was withheld to cover the tax liability. For example you may have reported all your income in one quarter, and thus you were required to withhold your taxes on that income all in that period. If you didn't do it that way, then you may wish to spread your income over the four quarters so that it shows that the taxes were only required to be withheld evenly throughout the year. This is called the annualization method. By doing so, you can reduce your penalty for underpaying the taxes.