topic Annualizing Income in Get your taxes done using TurboTax

Annualizing Income

thomasp5154 — Sun, 30 Mar 2025 18:53:57 GMT

Hi!!

While preparing my Trust return I was informed that there would be an underpayment of tax penalty which I expected. I followed the directive to finish the return and return to the program to annualize the income which hopefully will lessen the penalty since much of the income is Q3 and Q4. I put all income into a spreadsheet based on the directive but, I have no idea how to get back to the annualization worksheet in the TT program. I called support and I got no where with the agent.

Can someone give me some help getting back to the worksheet in the program to annualize?

Thanks

Re: Annualizing Income

BrittanyS — Sun, 30 Mar 2025 22:04:34 GMT

To get back to the annualization worksheet, you will follow these steps in TurboTax:

Click Other Tax Situations
Click Edit next to Underpayment Penalty
Continue through the interview questions until you get to Annualize Income Method, (Click Yes)
Continue Interview Questions (See screenshot below)

Re: Annualizing Income

thomasp5154 — Mon, 31 Mar 2025 10:31:46 GMT

Brittany

Thanks for the post and solution. It sounds simple and straightforward. Unfortunately, I need a little more hand holding because I don't see "other tax situations". I am in the step by step function and under federal taxes and the "other" tab in the banner but there is no underpayment penalty. It seems I am not where I need to be. Can you offer me some additional help? Many thanks Tp

Re: Annualizing Income

BrittanyS — Mon, 31 Mar 2025 12:36:08 GMT

I'll be glad to help you further. Can you clarify if you are using TurboTax Desktop or TurboTax Online?

@thomasp5154

Re: Annualizing Income

thomasp5154 — Mon, 31 Mar 2025 13:05:43 GMT

Brittany, Thank you so much. I bought a license from Amazon and downloaded the program with the Ket Code.

Re: Annualizing Income

BrittanyS — Mon, 31 Mar 2025 13:33:01 GMT

Okay, that should be the desktop version. The other tax situations would be located on the upper panel next to deductions and credits. See the screenshot below:

Please respond back if you are still having issues.

@thomasp5154

Re: Annualizing Income

thomasp5154 — Mon, 31 Mar 2025 14:52:30 GMT

Brittany

My product is simply Business but, it covers what I need and, specifically says for trusts. Now, I am doing a Trust and my top banner does not have a Personal tab.

Reads: General info - Federal Taxes - Federal Review - State taxes - File

Under Federal Taxes -

Income - Deductions - Distributions - Other

under Other there is estimated taxes but only a table to enter amounts and dates There is nothing about penalty

Thanks

Re: Annualizing Income

kapo1997 — Mon, 31 Mar 2025 15:05:26 GMT

Or you can go to view and search for Form 2210, then fill in the information on the Form. Turbo tax will then determine whether you need to pay the penalty based on the information you enter.

Re: Annualizing Income

DaveF1006 — Mon, 31 Mar 2025 15:54:36 GMT

Yes. Go to the forms mode in your return:

Select open form
Type in Form 2210 and this will open the form directly.
Fill in the information it requests.

Re: Annualizing Income

thomasp5154 — Mon, 31 Mar 2025 16:18:27 GMT

Hi Kapo!

Thank you for your help. Since I was at the simple TT table and the directive was to finish the return and come back to complete the table, I should be able to get to that table which the program will then create what is necessary in the Form 2210. I would like to get to that place in the program and go from that point. I had to file a 2210 once in the past and it's a typical IRS form which is complicated. Hoping Brittany has a suggestion.

Re: Annualizing Income

thomasp5154 — Mon, 31 Mar 2025 17:29:19 GMT

Dave

Thanks for the suggestion. It appears that consensus suggests I complete form 2210 and the program will do everything. Hopefully, the interview questions in the program are built into the directives on the form itself. Since my program seems to be a little different from what I see being suggested, I just want to be sure I am in the place I need to be to accomplish the task. From "step by step" select forms in the blue banner at top. My version opens a menu on the screen and Form 2210 is selectable. Open it and have at it. Sounds right ??

Thanks

Re: Annualizing Income

kapo1997 — Mon, 31 Mar 2025 19:14:21 GMT

Since you are talking about reducing your late payment penalty by annualizing income, you'll have to show most or a large part of your income came at the second half or last quarter of last year. I found it would be easier if you can tabulate your income on a monthly basis (on a spreadsheet), then you have to add: 1) the first 3 months income (Jan-Mar), then the first 5 months (Jan-May), and lastly the first 8 months (Jan-Aug), then you enter these into Form 2210 (make sure you click on the supplement AI to enter these values). Once you do that, then Turbotax will fill in the rest.

Re: Annualizing Income

BrittanyS — Mon, 31 Mar 2025 21:54:37 GMT

The steps provided by DaveF1006 will work as well. If you prefer the step by step method, you can follow these steps for TurboTax Business Trust entry:

Open TurboTax
Select Other Under Federal Taxes
Click Yes or No for Household Employment Tax depending on your circumstances
Click Continue
Enter any Tax Payments Made
Click Yes for Tax Elections
Click Continue past election forms if none apply
The next selection will bring you to the underpayment penalty screen, click continue
Click No for Possible Penalty Exception
Click Yes for Do you want to annualize your income

See screenshots below:

@thomasp5154

Re: Annualizing Income

thomasp5154 — Tue, 01 Apr 2025 09:27:57 GMT

Dave

Thanks again for the suggestions. I was exactly where you outlined with the spreadsheeting and the whole issue developed when I could not find my way back to the step by step interview for the minimization of the penalty. I know I am getting one. Thanks again.

Re: Annualizing Income

thomasp5154 — Tue, 01 Apr 2025 10:21:44 GMT

Brittany

Good morning!

Sorry for not answering sooner but, I was called away on a quasi-emergency as back-up BS for my granddaughter. I can't tell you how much I appreciate all community members for their personal efforts to assist a total stranger in need of assistance.

Your latest answer with the screen shots and detail shows you have gone to some extra effort. It pains me to tell you that the functionality as you described just does not work on my laptop. I don't know if it is the OS which is Windows 10 or something inherent in a bad download of the program.

On my first pass through the Other section last week, I elected NO to anything I knew did not apply which included Household Taxes and the Tax Elections. When I go back now to the list of sections to review, they all say Update but, I get only an option to update the number entry. Once I do so with either zero or a positive number the program brings me back to the menu page to select another category. This particular product from TT is without question the most frustrating experience I have had in my 20+ years of using TT products. I have generally used only the Deluxe product (cd Rom) and this year changed to the Premier to better enter address some rental property issues. I used the Premier with no problem for 4 Form 1040 preps. I was very surprised to find the Business product would not allow auto-input from third party financial houses like RBC, etc. I am mystified as to why a Business, Trust and Estate product would not have this functionality, and yet, it is offered on the simplest product offering to complete a Form 1040.

I want to thank you again for your assistance and continued support.

Re: Annualizing Income

thomasp5154 — Wed, 02 Apr 2025 13:37:48 GMT

BrittanyS, Dave1006 & Kapo 1997

Again, I thank each of you for your assistance. I am sending this reply to you three to closeout my issue and tell you where I landed. It is only fair I take some time to thank you for your time and effort on my behalf by telling you my conclusion so you build more experience with this issue in case this occurs in the future to someone else

I will start with the happy ending. I finished the return and by annualizing my income the penalty was reduced to $40. I was unable to use the step by step approach as I had hoped and as Brittany outlined so wonderfully in her final suggestion along with screen shots. I had to use the suggestion by Dave and Kapo to enter the data in the Forms view which worked. However, as I anticipated, it was more cumbersome and required more involved reading of the Form worksheets and IRS form directions to ensure correct input of the data. This was especially the case with Form 2210 which is more tailored to personal filing vs Estate and Trust filing. Basically, the Forms approach eliminates the reason we by the TT products in the first place. TT has the experts who have researched the IRC and developed shortcuts via interview questions which saves the filer a whole lot of time and research and the need for technical IRC competency to file a return. The Forms input was the only way I could proceed and it remains a mystery as to why and how the product failed in this area. After completing the data entry into the forms worksheets, much to my surprise during my final review the step by step functionality reappeared and the simple interview questions and the table to enter my 5 numbers from my Excel SS reappeared and annualized my income. So, I will have to say that it was user error or some program corruption but, it still remains a mystery. I tried every possible approach and could not get back to the step by step interview questions for annualization of income and calculation of penalty. If I find time, I will do another Trust return with fake data and see if the same issues occur.

Many thanks

Tom P