Low income early in year, but I didn't pay enough quarterlies, now have penalty

[Qmavam]

 Simple, my total income up to 8/14/24 was $7,500, the bulk coming after that, most on 12/23 with $110,000.

More complete,

My income was $2,500 on 3/31, $2,500 on 6/31 $2,500 on 8/15 $12,500 on 9/30 and $7,000 on 12/13, $110,000 on 12/23 and 2,500 on 12/31.

  I didn't properly pay my quarterlies, so looking at $500 penalty. Does the IRS look at timing of income in making the penalty?

Oddly, one quarterly payment made thru EFTPS and cashed was not credited to my account. Working on it!

[MindyB · Accepted solution]

Yes.  You can annualize your tax. Here is how to enter the information in TurboTax Online:

1. Navigate to Federal > Other Tax Situations > Additional Tax Payments > Underpayment Penalties > Start or Revisit
2. Continue through the questions until you arrive at the screen Annualized Income Method, answer Yes, and Continue on the next 2 screens
3.  Enter the what you earned in the first 3 quarters on the screen Annualized Adjusted Gross Income, ensuring the amounts are cumulative for the year. Note, that the large amounts from Q4 will automatically be assigned to Q4.
4. Similar to step 3, on the screen Itemized Deductions on Schedule A enter the what your deductions were in the first 3 quarters, ensuring the amounts are cumulative for the year. 
5. Continue with the process for the following screens until you reach the Conclusion, which needs to be unchecked if you want to see the results.
6. Continue through the interview, answering the questions, until you reach Underpayment Penalty, which tells you what the underpayment computed using the annualized method is.

See also: Why am I getting an underpayment penalty if I'm getting a refund?

[Qmavam]

Thanks MindyB, that was fast!