Needing to perform the onerous task of annualizing income on Form 2210 is an unfortunate consequence of incurring a large amount of reportable income late in the year, not having sufficient taxes withheld throughout the year to cover the additional tax liability and needing to make a Q4 estimated tax payment to make up the difference. Without annualizing, the default calculations on Form 2210 will result in a determination of an underpayment penalty for the earlier quarters of the year since, by default, income and regular tax withholding are treated as having been received and paid uniformly throughout the year while estimated tax payments are not.
