State tax filing
I think I see the disconnect and possibly a problem with your return. You are correct that the exclusions should be already accounted for when determining any additional amounts due.
Let's start with the disconnect:
I didn't say to divide by 4, I simply said to divide the earnings by period, not by the number of periods. You are right that is a big difference. The instructions for Line 11 includes: You may elect to report your income based on the actual dates of receipt. If so, enter income received between January 1 and March 31 in the first column; enter income received between January 1 and May 31 in the second column; enter income received between January 1 and August 31 in the third column and 100% of your income in the fourth column.
Let's try an example for someone with $100,000 income for the year.
- Of that $60,000 was earned in the last 3 months of the year.
- $5,000 in the first 3 months
- The last column is your total income, always from line 16 of 502.
The form would be filled in as such:
- Q1 earned $5,000 so we enter $5,000
- Q2 earned $8,000 so we enter $8 + $5 = $13,000
- Q3 earned $27,000 so we enter $27 + $13 = $40,000
- Q4 earned $60,000 so the program will enter total income of $100,000 (40k + 60k)
Because this income was earned primarily in the final quarter, the taxes would be much lower than if they were spread throughout the year.
Possibly a problem:
Let's double check the income and exclusions you mention.
The annualization form says on line 1 to use line 16 of Form 502.
Let's look at Form 502. Line 16 comes after all the additions, subtractions, and exclusions are accounted for so that only your final income is left.
You are stating that your column 4 is not accounting for the exclusions just above line 16 on the 502. Please review your return and answer questions to get the exclusion entered. Once your exclusions are properly showing on the 502, the program will be able to correctly enter your income.
