I made a big IRA conversion to a ROTH on December 28th, Turbo Tax is applied a $735 penalty to my Indiana return for tax underpayment last year. Why a penalty?

[AmyC]

If you owe more than $1,000, a penalty is generally added to your tax bill for underpayment throughout the year. The Indiana instructions in IT-40 Booklet state on page 9:

Generally, if you owe $1,000 or more in state and county tax for the year that’s not covered by withholding taxes, you need to be making estimated tax payments. You might owe this penalty if: 

• The total of your credits, including timely made estimated tax payments, is less than 90% of this year’s tax due or 100% of last year’s tax due, ** or 

• You underpaid the minimum amount due for one or more of the installment periods. 

If either of these cases apply to you, you must complete Schedule IT-2210 or IT-2210A to see if you owe a penalty or if you meet an exception. 

• If you owe this penalty, complete Schedule IT-2210 or IT-2210A and write the penalty amount on Form IT-40, line 20. 

• If you meet an exception, complete Schedule IT-2210 or IT-2210A to show which exception was met

Since your income was primarily at the end of the year, you will want to use IT2210-A, as described on page 10 and annualize your income to reduce your penalty.

[gcreasey--]

Please note that the 2022 Indiana Schedule IT-2210A in Turbo Tax has a software error.  The value in Section III, Item 19 Column B does not transfer to Item 13 Column C like it is supposed to and all of the subsequent calculations are affected.  I tried to contact Turbo Tax IT but unable to do so.   It caused Indiana to send me a notification of the problem which caused them to reject Schedule IT-2210A which made me have to pay a penalty.  No help from Turbo Tax whatsoever.

[DMarkM1]

I have been unable to duplicate your error in TurboTax Premier Desktop; it appears to work for me.  Would you mind sending a sanitized version of your return so I that I might take a closer look?  

If so, in your desktop version use the "Online" tab at the top of page and select "Send tax file to agent."  After that repost here with the token number and @DMarkM1  please.

@gcreasey--   

[gcreasey--]

DMarkM1,

Thanks for the reply.  I don't know how to send a sanitized version however upon doing the IN IT-2210A manually, the TT error occurs in Section III, Line 13, Column C.  The value at this location is supposed to be the same value as Section III, line 19, Column B.   It is a different number in the TT generated IN IT-2210A.   This incorrect value may have been pulled from Section III Line 12 or 12a Column B since the value at these locations match the incorrect value in Section III, Line 13, Column C.  FYI, I am not going to pursue this any further.  I am going ahead and making the additional payment  (that shouldn't be due) to Indiana because its just not worth the effort or any more time involved with it.  Its not a huge sum of money.  Thanks again for your help.

[VolvoGirl]

TurboTax Online

1. Sign into your online account and select Take me to my return

2. Locate the Tax Tools on the left hand side of the screen.

3. A Drop down will appear. Click on Tools, then Share my file with agent.

5. This will generate a message that a diagnostic copy will be created. Click on OK, the tax file gets sanitized and transmitted to us.

6. Please provide the Token Number that was generated onto a response

[gcreasey--]

DMarkM1,

Regarding Indiana Schedule IT-2210A.  I should have mentioned to you that this incorrect value in Section III, Line 13, Column C then affected the subsequent calculations that used this value as well.  

[gcreasey--]

The 2022 TT premier edition I have is the CD version.  Does this make a difference?

[gcreasey--]

DMarkM1,

Well, I was able to send you a diagnostic version.   Code 1079704.  

GC

[gcreasey--]

VolvoGirl,

OK, it worked on my CD version and I sent it in to DMarkM1.  Thanks for the help.

[gcreasey--]

DMarkM1,

Regarding Indiana Schedule IT-2210A:

I sent in the sanitized return on Token # 1079704 on 2/23/23.  Have you been able to review it yet?  I would like to have this apparent software error corrected so I can send in a revised return to get the penalty dollars returned.  FYI,  Indiana did not accept the calculations on Turbo Tax IN Schedule IT-2210A and sent me a notice of the penalty being applied while Turbo Tax calculated I had no penalty.   Thanks, GC

[DMarkM1]

I took a look at your sanitized tax file specifically IN form IT-2210A.  I did the calculations by hand and they appear to be correct showing no penalty due.  Below is a screen shot showing lines 13-25, all columns.  Bottom line is with the withholding shown from W2s and the tax payments you entered with dates, the minimums were paid each quarter so there would not be any penalties.  

Be sure you have the most up-to-date version of your TurboTax software.  Click the "Online" tab at top of your page and "check for updates."  Compare the screenshot below with a printout of your submitted return or any calculations from the IN letter you got to see any potential differences.  

[gcreasey--]

DMarkM1,

Thank you so much for staying with me on this.  My own calculation was in error due to my misinterpretation of Line 13 instructions which was to include the amount from line 19 of ALL preceding columns not just the preceding column.  I have submitted a letter to Indiana DOR for a review of my return where they disallowed the Turbo Tax calculated IT-2210A which showed I owed no underpayment penalty.  Thank you again for the effort you have put in to assist me in this matter!

[PII Removed]

[gcreasey--]

Thanks so much DMarkM1 for taking the time and effort to review my problem with IN 2210A.  As it turns out, the TT software was correct.  Indiana originally rejected my IN2210A TT calculations in error of which I made a claim against and upon Indiana's review, they acknowledged the error and removed the penalty.   In addition I also made an error in stating that TT had a software error of which it didn't.  My error was from my own misunderstanding of the Indiana IN2210A form instructions of which you enlightened me on.   My complaints against TT was unjustified and I profusely apologize for my statements.  Turbo Tax has proven to be exactly what they are, a great tax software provider.  Thanks again DMarkM1 for your time, effort, patience and knowledge regarding my issue.  GC