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sleere
New Member

We upped our 4th qtr est tax to cover interest on old savings bonds that we cashed. It accurately met our tax liability but penalty for "underpayment" of best tax. Avoid?

 
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AmandaR1
New Member

We upped our 4th qtr est tax to cover interest on old savings bonds that we cashed. It accurately met our tax liability but penalty for "underpayment" of best tax. Avoid?

Because you received extra income in the last quarter, you may need to select to annualize your income.  The underpayment of estimated tax calculation assumes total income was earned evenly throughout the year (as is usually applicable). 

The annualized method for calculating the underpayment, allows you to report income and deductions earned each quarter. 

To apply this method, from within your return, search in the top right box "annualized adjusted gross income" and select the first "jump to" link that results. The software will show you the total amounts for each category on your return, for the year, and you'll need to enter how much is allocable to each quarter. 

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