Here are the current (03/25/22) IRS instructions at the top lines of the 2021 Publication 505’s Worksheet 2-8. Qualified Dividends and Capital Gain Tax Worksheet for line 12 (the tax computation) of Worksheet 2-7 Annualized Estimated Tax Worksheet:
“Note. To figure the annualized entries for lines 2, (qualified dividends), 3, (capital gains), 5, and 6 below, multiply the expected amount for the period by the annualization amount on line 2 of Worksheet 2-7 for the same period.”
As of March 24th, 2021, the turbo tax programers for REV 03/19/22 of the desktop Mac version, have decided NOT to annualize the capital gains when calculating the amount to include in line 3 of Worksheet 2-8. This is inconsistent with their treatment of qualified dividends, line 2 and is illogical since they annualize the capital gains when calculating the Annualized AGI, line 1 of the same Worksheet.
This has the effect of over estimating the the estimated tax due for the first three periods, and consequently may impact the penalty calculation.
Although this is not a bug nor an arithmetical error, but rather a conscious election, it has been called to their attention and is scheduled for review, but not likely to change for tax year 2021, according to an opinion of one of TT's CPAs. It is not possible to override the TT entries. The only workaround now is to print out all the other forms except 2210 and page 3 of the 1040, (lines 37 and 38, the penalty), fill in the proper amounts and file by mail if the penalty correction is significant.
