Form 2210 Annualized Income - How to annualize itemized deductions?

[kkmrhktax]

Tax Year 2023 was the first time I tried using the annualized method since I stopped working. I'll admit, I don't know if I did this correctly. I didn't try using the What-if option in Turbo Tax 2022 to see if I could use the annualized method for 2023 estimates. 

I created an Excel workbook that has multiple linked worksheets for Federal Estimated Tax Worksheet 2-1, 2-5, 2-7, and 2-8. Also, I added and linked worksheets with income interest, dividends, capital gains, and all itemized deduction line items. I tried to mimic as many federal and state forms as possible. Since I have qualified dividends, I used Annualized Income Worksheet 2-7 and 2-8. I track just about everything in Quicken, so I can export the relevant transactions into the appropriate worksheet.  As discussed in this thread, , I limited Schedule A line 5 SALT taxes to $10,000 for each reporting period (end of 3/31, 5/31, 8/31, and 12/31). Due to the timing of our property tax payment, the $10K limit was hit during the period ending 8/31. Also, used the 7.5% threshold for Schedule A medical expenses for each reporting period.

Hopefully this is correct. I'll compare to TT2023 annualized income method when I receive all forms.

Do you think I'm on the right track? 

Also, I'm trying to learn about the Alternative Minimum Tax as I might need to take some large long term capital gains in 2024.  Any comments about incorporating AMT into the Annualized Income method? I am trying to add Form 6251 into the workbook, but I'm not sure how to do this correctly.

Side note: There were some other threads about earlier versions of TurboTax calculating short term carryforward losses incorrectly. I'll manually deal with this if needed.

[fanfare]

Schedule AI instructionw were written before SALT limitations, and not updated.

We  blue states hope this all EXPIRES on time, or better, repealed now.

[stife94]

For 2022 and 2023 I ended up doing what I had written about last year: Added up my SALT amounts for each period and wrote a formula in Excel to take the smaller of my SALT amount or $10,000/X with X being the annualizing factor. For me, the important thing about annualizing is that I get a disproportionate amount of taxable income in the fourth quarter and want to wait until the last minute to pay. I just didn't want to mess up annualizing the deductions and raise a red flag. Anyway, for 2023 it turns out I'll be taking standard deduction.

For 2023 I tracked taxable income including qualified dividends and long term capital gains in Excel and then went to Turbo Tax 2022 and used the estimate tax tool for 2023. I made changes each quarter as needed. If you put in the payments you already made it recalculates the next quarter. Then in January 2024 I used TT2023 to figure out the fourth quarter payment. I didn't have all of my 1099s but I could figure out the amounts based on what I had already tracked during the year.

Can't help you with AMT.