I am assuming you are trying to enter your annualized income for 2020 so you can prepare any estimated tax payments.
You will go through the state interview screens for Maryland.
When you see the following screen, select Other situations.
On the next screen, select Estimated and Local Income Tax.
You will be prompted to answer several questions that are used to determine if you will owe any taxes in 2020 based upon your input.
Hi JotikaT2,
Thank you very much for your help.
My question is about how to input the annualized income to avoid the underpayment penalty for 2019 Maryland tax return, not the estimated tax for 2020.
Since my income is not evenly across of the year, I need to type in the income for the periods of 03/31, 05/31, and 08/31. As I remember, last year there was a link of ‘Underpayment Penalty’ in the section of ‘Other Situations’ for Maryland return. With the link I typed in quarterly income amount, and the annualized income calculation allowed me to avoid the underpayment penalty for my 2018 Maryland return. But so far the link of ‘Underpayment Penalty’ is not there for 2019 Maryland tax return.
Would you please continuously help me to resolve the problem? Is the form available now? Where I can find the link for the input?
Your help is greatly appreciated.
Thanks,
Go back into your MD return, keep hitting continue/yes/no until you get to the MD credits screen.
This method for annualizing income in the Maryland state return doesn’t seem to work in the online version of TurboTax 2021. Can someone tell me how to do this? I want to show more income towards the latter part of the year in the MD return to remove the underpayment interest that TurboTax has calculated.
Yes, it works when I tried it just now in the online version of TurboTax.
It asks you if you want to try to reduce your underpayment penalty by using the annualized method and you say yes. Then it asks you to break your income down per each period (Each period begins with January through the ending date) with the ones before it. Then it asks you to break down your withholding per period with each period only showing the amount for just that period.
Then it tells you the amount of penalty calculated.
Taxes are a "pay as you go system". You are supposed to pay taxes on the income as you earn it. Then, when you get to the end of the year, the correct amount of taxes should be paid in to cover the income earned. If you do not pay them as you earn the income, then you can be subject to an underpayment penalty to be due in addition to the balance due on your tax return.
BTW - there are no prompts in TT for 2022 taxes to annualize Maryland income for the year. You have to open Form 502UP and do it manually. Open the form and go down to the table of values shown for each quarter and there is a box to check to allow you to annualize. When you check the box, the income values for the first three periods go blank and you can manually enter the correct values.
agreed, using form view + 'annualize' you can edit SOME of the MD 502UP values.
But not line 14. Why not?!
UPDATE: The form view allows editing of line 14, but not ON line 14; you can find the same values farther up the worksheet, and edit them there. Thanks @AmyC
Line 14, you can just type right in it. All the boxes with a plus sign when you click in it means that you can just type into it. If you are not able, you need to close the program and update.