Annualized Adjusted Gross Income 4th Qtr

Forum|Forum|2 years ago
February 2, 2024
3 replies
19 views

I am usig the Annualized Adjusted Gross Income form in Turbotax. It only allows me to enter my adjusted gross income income for the first three quarters. Most of my income was in the 4th quarter.

Mike9241

Level 15

that's because the 4th quarter is your actual return so no entries are needed.

Mike9241

DavidP5Author

Level 2

I must not have been clear in my problem. I have a modest pension and have more than enough deducted from it to cover my taxes. I also had a big distribution from my IRA in the 4th quarter and paid more than enough at the same time (via form 1040es) to cover the taxes. I have a big refund coming. But Turbotax is calculating a penalty for underpayment. I tried to use Turbotax's Annualized Adjusted Gross Income form to show the 1040es payment; but Turbotax will only allow me to show the regular deductions from my pension.

PatriciaV

Level 15

Have you entered the estimated taxes for the fourth quarter? Typically, the underpayment penalty calculation divides your withholding into equal amounts for each quarter. If you had sufficient taxes withheld from your pension distributions, each quarter should have no tax due. But if you haven't entered the estimated tax payment for the IRA distribution, the annualized method won't work.

Also, the calculations on Form 2210AI use a ratio of each quarter's income to the total for the year, then subtract those amounts from the total to arrive at your 4th quarter income. This is why there is no entry for quarter four. The total tax due for each quarter is matched with the allocated withholdings plus any estimated tax payments.

If you are using TurboTax for desktop, you can follow these calculations on the actual forms using Forms Mode. But if you are using TurboTax Online, you would need to either pay for your return first (to print out the forms you need) or purchase TurboTax for Desktop and export a copy of your online return.

Your final option is to upgrade to TurboTax Live so that a tax expert can walk through your return with you.