Form 2210 is not ready in TurboTax which is why the program is currently defaulting to Let the IRS Bill Me Later. Once the form is available you will have options to reduce or eliminate the penalty. Form 2210 is scheduled to be available on February 25.
Once the form is available, you can annualize your income. The IRS is a pay-as-you-go system. The default penalty calculation spreads income and tax payments equally through the year, regardless of when received. Annualizing will reduce your penalty if most of your income was received in the second half of the year.
You can also request a penalty waiver due to a casualty, disaster, or other unusual circumstance.
The law allows the IRS to waive the penalty if:
- You didn't make a required payment because of a casualty event, disaster, or other unusual circumstance and it would be inequitable to impose the penalty, or
- You retired (after reaching age 62) or became disabled during the tax year or in the preceding tax year for which you should have made estimated payments, and the underpayment was due to reasonable cause and not willful neglect.
For more information, refer to the Instructions for Form 2210
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