form 2210

[liuxuhan2021]

Hey,

we need to fill in form 2210 because we didn't withhold enough tax this year.

I have some questions about the penalty:

As I know, if we withhold more than 100% of the tax from last year, we should meet the requirement of safe harbor.

However, in 2021, we just came to the U.S. in Dec and we only worked for 1 month. So it seems like our tax year is less than 12 months. In this case, do we need to pay a penalty?  

[JohnB5677]

You are correct, and that is what the safe harbor states.

I suggest you run through the calculation, but ultimately request that the IRS do the calculation.

To calculate and post a penalty.

1. Start at Other Tax Situations on the side banner.
2. Scroll to Additional Tax Payments
3. Select Underpayment Penalties
4. You chose to let the IRS bill you later.
   1. Choose continue to have the IRS do the calculation.
   2. Select Let’s Figure it Out to calculate the penalty amount.
5. Continue through the interview.

The underpayment penalty may apply if:

• The amount of tax you paid during the tax year is less than 90% of the tax that you owed for the current year. 
• The amount you paid during the tax year did not equal 100%, (110% for higher incomes) of your taxes owed the prior year. 
• The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000, after subtracting withholding and refundable credits.

To avoid this situation, it is recommended that you adjust your W-4 with your employer or pay estimated taxes.

[Critter-3]

Since your 2021 return did not cover income for the entire tax year you will not be able to use the 2210 to avoid the penalty based on the safe harbor rule.   You can try using annualized income installment method but it is a pain and may not make any difference.

https://www.irs.gov/instructions/i2210

[Mike9241]

Who Must Pay the
Underpayment Penalty
In general, you may owe the penalty for 2022 if the total of your withholding and timely estimated tax payments didn't equal at least the smaller of:

1. 90% of your 2022 tax, or
2. 100% of your 2021 tax. Your 2021 tax return must cover a 12-month period. so you can't use exception 2. 

the other exception is if line 7 on the 2210 is less than $1,000

Turbotax should be able to figure the penalty automatically if you owe . the actual form may not be required. 

[liuxuhan2021]

hey! 

so if I choose to let the IRS bill me later, do I have to pay additional interest or other fees if I choose to pay later? 

[liuxuhan2021]

I believe I do owe taxes and need to fill in form 2210.

The only question is

if the penalty can be waived (seems not possible)

and do I need to use TurboTax to calculate the penalty or let IRS do it?

[Critter-3]

Follow the program screen instructions ... the program will calculate an estimated underpayment penalty automatically based off the information you enter but the fed/state retain the right to add penalty/interest  based on the info they have and when you pay ... they will bill you for any extra fees.