The way to eliminate the penalty for income received late in the year, if you do meet one of safe harbors to avoid an underpayment penalty you must annualize income on Schedule AI of Form 2210. When TurboTax determines that you would otherwise be subject to an underpayment penalty, TurboTax does ask if you want to annualize income and guides you through the process.
When annualizing income on Schedule AI you must annualize all income, so there is no point in TurboTax asking about the timing of only your retirement income. Also, it would be extremely disruptive to most other users if TurboTax was to ask all users about the timing of each item of income, so it is impractical for TurboTax to ask about the timing of any item of income during the income-entry process.
Annualizing income won't always eliminate the penalty if you underpaid for any particular quarter. Only tax withholding applies to all quarters evenly by default. Estimated tax payments apply when paid. This means that tax withholding later in the year can make up for underpayment earlier in the year while estimated tax payments cannot. If you can't generate enough tax withholding from existing sources late in the year to make up for the amount of underpayment earlier in the year, you can sometimes manufacture tax withholding by taking a rollover-eligible retirement distribution, have a majority of that distribution withheld for taxes, then roll over the entire gross amount of the distribution by substituting other, nonqualified funds.
@hkluis , if you can afford to do so you can further increase tax withholding by submitting another W-4 specifying a greater amount on line 4(c). However, if the underpayment for, say, Q1 is large, you might have to increase tax withholding well beyond the total amount needed for the year just so that 1/4 of that additional withholding will be applied to Q1.
