I went to Federal Taxes > ‘Other Tax Situations’ tab > Additional Tax Payment > Underpayment penalties > Update. It says “You have a penalty of $6. Do you want to see if you can reduce or eliminate the penalty?” I answered “ Yes”. I answered the question about fishing and gaming (no), 2023 tax liability (transferred from 2023), 2023 AGI (transferred from 2023), and then answered “Do you want to annualize your income?” I answered “yes”.
Annualized Income
Most of my income and most of my withholding (pensions) is in the 4th quarter.
I entered accurate information for cumulative income for each of the 4 boxes (the end dates do not correspond to the end of a quarter). The penalty was $0. I did not elect to treat the tax as paid when it was actually withheld. There is a Form 2210 now and it is filled out. Line 19 Penalty is $0, However, there is an exclamation mark by Form 2210 and it says “Not Done”. ???
I went back and elected to treat the tax as paid when it was actually paid. I entered the figures for each of the boxes, paying attention to the end date for the box. The Form 2210 now says the penalty is $1. The $1 penalty is assigned to the 2nd box for being 6 days late on the estimated tax payment. And it still says “Not Done’. ???
No matter whether I do annualized income only or both annualized income and treating the tax as paid when it was actually paid, both the Form 2210 and the Underpayment Penalty Worksheet have a column for 01/15/2025. It looks like it is expecting an installment of around $11K (!!) by that date. But, my tax obligation was already satisfied at the end of 2024 by the 2024 withholding and the total 2024 estimated tax payments that had been made in 2024.
I have tried to fill in the box on the Date of Payment screen, for “Date you will pay the balance due”. No date will work. Maybe, this is because today is after 01/15/2025. But, as I say, my tax obligation was already satisfied at the end of 2024 and I shouldn't have had any more installments to make. If I had made an $11K estimated tax payment by 01/15/2025, I would be getting it back as a refund plus the refund that I already have coming.
Something seems not to be working right here??
