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Level 2
February 28, 2020
Question

Annualized Income

  • February 28, 2020
  • 2 replies
  • 12 views

I started doing some 401K/IRA distributions and Roth conversions at the end of last year and made estimated tax payments in the corresponding quarter.  Despite entering this distribution information in TurboTax it never even suggested entering Annualized Income information to avoid paying penalties on my taxes due to the 'lumpy' income.  This seems like a very basic and common issue with retirement distributions and capital gains yet the information is buried away and not suggested as a possibility by the program.  This seems like a glaring defect.

    2 replies

    MaryK4
    Level 15
    March 1, 2020

    Most people do not go through the entire Underpayment Penalty section of TurboTax to see if they can reduce their tax using the Annualized method.  If you had a significant penalty, you can amend your return to get a reduction of penalty.  

     

     

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    RRNelsonAuthor
    Level 2
    March 1, 2020

    I don't think I was shown that screen before I started searching for annualized income.  Thanks for the information.