You’re being asked for information that might help lower the underpayment on Form 2210 by using an “annualized income installment method.”
On Line 16, , according to the 2021 Instructions for Form 2210, you need to “Enter all of the other taxes you owed because of events that occurred during the months shown in the column headings.”
On Line 18, “For each column, enter the credits you’re entitled to because of events that occurred during the months shown in the column headings. These are the credits you used to arrive at the amounts on lines 1 and 3 of Part I, Required Annual Payment.”
When you’re computing your underpayment of estimated tax for the year, you might be able to lower or eliminate the amount of one or more of your installments by using this method.
You can use this computation when your income varies during the year – for example, because you have a business that’s run on a seasonal basis, or you had a large capital gain late in the year.
Please see Schedule AI—Annualized Income Installment Method in the instructions linked above for more information.
