Thank you for your reply. I still have questions.
I am discussing how to use TurboTax to calculate my 2025 Estimated Tax Payments.
Regarding TurboTax, I found no way to enter my 2025 income by Quarter, only annual or annualized amounts. If TurboTax has a way to enter my income by Quarter, please point me to where I can do so.
Let me restate my situation using hypothetical numbers.
W-2 Wages = Zero
Dividends and interest and the like, say $1,000 per month
Social Security say $3,000 per month.
Taxable IRA Distribution - Maybe $5,000, maybe $40,000, maybe lots more if I decide to buy a car or house, in November.
(Aside: I think the question is the same regardless of the source of the November income, as long as it is a taxable source - eg: Lottery winnings.)
One issue is that the November income is unknown before Q4, and that income also impacts the tax on the Social Security payments already received earlier in the year.
I know I could estimate or guess at the maximum November payment to be received, but then I'd likely be instructed to significantly overpay the Estimated Tax Payments for Q1, Q2 and Q3, with money that I have not yet received.
Yet, if I send Estimated Tax Payments only based upon what I actually receive in Q1, Q2 and Q3, TurboTax says I owe a late payment penalty. (I ran a test, using Forms 2210 & 2210-AI.) The penalty varies depending upon the size of the November payments and the size of the Social Security payments.
I understand that if I knew the taxable amount I will receive in November, I could spread the payments over Q1, Q2 and Q3. But, if I don't know the size of the November taxable payment, I end up with a late payment penalty.
(Is it possible that the TurboTax calculation of Forms 2210 & 2210-AI calculate the late payment penalty incorrectly in this case? The IRS says that tax payments are required on a "pay as you go" basis. Getting a penalty because November income was much larger than previous quarters' income is contrary to that statement.
Or is it possible that the IRS Forms 2210 & 2210-AI don't comply with the regulations and laws? [Gasp!])
I hope this better explains my dilemma and my question.
Any help is appreciated.
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Regarding the IRS link you provided, Form 1040-ES, Estimated Tax for Individuals - This has a link to calculate W-4 Withholding but I am not talking about W-4 withholding, I am talking about Quarterly Estimated Tax Payments. I saw no link to a Quarterly Estimated Tax Payment Calculator. If there is such a link, please provide it.
(I did see forms 2210 & 2210-AI, but these are not calculating forms, they only accept the numbers you type in.)
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Lastly, If I pay estimated taxes based upon actual Q1, Q2, & Q3 income, is there a way to send an explanation or contest the calculated penalty?
