2021 Form 2210 Calculation Error

[dr3412]

I had the same problem with my overpayment not showing on line 11. Since the overall result using the AI method was no penalty on the 2210 I filed as is and it was accepted by the IRS. 

[sandy4042]

Thanks, @dr3412 that's good to know that your return was not rejected.  Gives me hope that mine won't.  I want to avoid paper filing as the IRS is understaffed and more human processing of a paper return probably drives up the chances of an error occurring.  This, after I have painstakingly gathered my data, entered it and reviewed it multiple times seems counterproductive.

There is a strange hint that TT is looking at the 2020 overpayment (refund applied to 1st quarter of 2021).  The Underpayment Penalty Worksheet which you can see by doing a Quick Zoom of Line 19 Penalty on Form 2210, has a couple entries (in my case) that are the correct overpayment (instead of underpayment) for the payment dates, 4/15 and 6/15.  It could have only arrived at these figures by using the long lamented seemingly ignored 2020 overpayment. But the sheet still conflictingly says in its top line summary for the payment dates that I have an underpayment, though it doesn't go through the penalty calculation.

[JoeLes]

Since TT already calculates the underpayment penalty, Form 2210 is not necessary.    So, I went ahead and deleted form 2210 (and associated worksheet).   Search TT Help on How to delete a form.    After doing this, I was able to e-file without any problems.

[sandy4042]

@JoeLes I don't think that would work for me.  I have a Form 2210 because without its annualized income installment method, TT reduces my refund (1040, line 34) by $70, the penalty amount.  Using the annualized income method (I had a Roth conversion in December) correctly makes my penalty zero, but I have to fill out Form 2210 to document this.   TT's Form 2210 with input by me does make the penalty go away, it's just that it's missing 2020 o/p credit which on parts of the form make it look like I did have an underpayment.

[Tax4fp]

Latest update on 4/7/22 appears to fix the Form 2210 error with 2020 refund to be applied as credit for 2021.  After this update, the amount of this refund credit increased Form 2210 line 11(a) by the amount of this carryover credit.  However, the latest TT update still does not fix the errors in Form 2210AI line 14 (a)-(c) that result in incorrect tax calculation whenever long term capital gains occur in any of the first three payment periods.

[sandy4042]

@Tax4fp That's great about the 2020 overpayment bug being fixed!  However, I already e-filed on Monday without the fix.  I've saved a copy of my tax file and the PDF for the filing, with a note on my paper copy that TT didn't include the overpayment on 11a).  The end result in my case, no penalty, is the same with or without the fix.  Do people generally still run TT to generate an updated tax return after a bug has been fixed even though they don't intend on filing an amended return?  I like the idea of my saved return matching what I filed, and don't want to keep an extra return since I'll  forget (or will confuse my executor) what it was for.

[ibjim88]

They’re aware and working on the col a-c LTCD not being annualized issue. Probably not to be corrected for 2021 tax year. Work around  is to combine LTCG with qualified dividends for the first three columns. 

[KCN]

So glad that TT fixed the bug for line 11 of Form 2210!!   @sandy4042, I usually don't update TT after I've submitted my tax return because I want to be able to pull up exactly what I submitted to the IRS.   I'll probably wait just a little longer to see whether they fix the the bug with LTCG not being used on the AI form primarily because I find it easiest to calculate estimated payments required for a tax year with the preceding year's TT.   So I'll use TT2021 for 2022 estimates.  

[sandy4042]

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@KCN wrote:

  So I'll use TT2021 for 2022 estimates.  

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Yes, I will open TT2021 with my tax return to do the "What if" (such a handy tool) to determine/double check my quarterly payments for the rest of 2022.   I guess I will just not update my backup copies (data and PDF) that represent what I filed.  And actually my basic data hasn't changed just what TT does with it on Form 2210.  So I'm OK if when TT2022 comes out it pulls up up 2021 data last accessed by the updated TT2021 program.

[pkleeberg]

I am currently stuck and unable to submit my tax forms electronically.  I think my problem is similar to @sandy4042. 

On form 2210 part two, line 10, tax withheld smart worksheet, the first box for a calculated withholding for January one through April 15 remains red.  On line 11 everything is correct but on the easy step it only captures the amount from the first quarter as opposed to the entire year and it claims that there is an error so I cannot submit my taxes.

I exercised an ISO and retired in the middle of the year and paid 110% of my tax burden from 2020 so as to avoid a penalty. I still have a small one however. If I don't use this form, my tax penalty will be higher. Any suggestions?

Paul

[sandy4042]

@pkleeberg "On form 2210 part two, line 10, tax withheld smart worksheet, the first box for a calculated withholding for January one through April 15 remains red" 

Are the amounts in those boxes correct?  You said you retired mid-year, so your withholding reported on your W-2 should be attributed to the first two quarters.  Did you check box D (withholding to  be calculated as of date paid instead of equal installments) as well as box C?

I had a case a few years ago where my spouse was an employee for the first three months of the year only and my penalty didn't go away until I checked box D and entered the details of when the withholding was done.

[RRArtie]

@sandy4042  I have been known to do what ifs after filing to check what might happen next year and I use the old year to update and print the Form 1040-ES for each quarters estimated taxes. I keep the original filed forms and the for record forms (with worksheets) in pdf files. I save and rename the file that I am changing after filing so at least the original data is there in the original file. That will not prevent TT from recalculation after updates through the year, but at least I have the pdfs as a record of what went to the IRS.

[sandy4042]

Thanks @RRArtie for info on how you keep your backup of original filing intact and make a copy when you're doing the What-ifs.  I did the same last year, had a copy that I accessed during 2021 using TT2020 to guestimate my quarterly 2021 payments.  I named it with "what-if" embedded in the name so I could easily distinguish it from my e-filed data file.  Then when it came time for filing this year, I had TT pick the file that had been actually filed to carry over data (just in case I messed with the original data when doing my What-ifs).  I had an exception to this rule last year when I had to file an amended paper return for 2019, then I made sure to have TT pick up the amended return when starting my 2020 return.  So for 2019 I had two data files and two PDFs to save.

[Scooby19]

TT is notorious for "rounding" and generating errors on forms.  You can fix some of those legally by changing the culprit by one dollar up or down.  If you go all the way back to your inputs and round up or down any figures you may resolve this.

[sandy4042]

That's good to know, @Scooby19 .  I've wrestled with that before, when rounding the cents on the detail amounts will make the summed up amount off.  Nice to know it is legal to adjust the rounding on the detail to get the summary amount more in line.