Annualizing Income

[thomasp5154]

Hi!!

While preparing my Trust return I was informed that there would be an underpayment of tax penalty which I expected.  I followed the directive to finish the return and return to the program to annualize the income which hopefully will lessen the penalty since much of the income is Q3 and Q4.  I put all income into a spreadsheet based on the directive but, I have no idea how to get back to the annualization worksheet in the TT program.  I called support and I got no where with the agent.  

Can someone give me some help getting back to the worksheet in the program to annualize?

Thanks 

Tp

[BrittanyS]

To get back to the annualization worksheet, you will follow these steps in TurboTax:

1. Click Other Tax Situations
2. Click Edit next to Underpayment Penalty
3. Continue through the interview questions until you get to Annualize Income Method, (Click Yes)
4. Continue Interview Questions (See screenshot below)

[thomasp5154]

Brittany

Thanks for the post and solution.  It sounds simple and straightforward.  Unfortunately, I need a little more hand holding because I don't see "other tax situations".  I am in the step by step function and under federal taxes and the "other" tab in the banner but there is no underpayment penalty.  It seems I am not where I need to be.  Can you offer me some additional help?  Many thanks  Tp

[BrittanyS]

I'll be glad to help you further.  Can you clarify if you are using TurboTax Desktop or TurboTax Online?  

@thomasp5154 

[thomasp5154]

Brittany, Thank you so much.  I bought a license from Amazon and downloaded the program with the Ket Code.

[BrittanyS]

Okay, that should be the desktop version.  The other tax situations would be located on the upper panel next to deductions and credits.  See the screenshot below:

Please respond back if you are still having issues.

@thomasp5154 

[thomasp5154]

Brittany

My product is simply Business but, it covers what I need and, specifically says for trusts.  Now, I am doing a Trust and my top banner does not have a Personal tab.

Reads: General info - Federal Taxes - Federal Review - State taxes - File

Under Federal Taxes -

Income - Deductions - Distributions - Other

under Other there is estimated taxes but only a table to enter amounts and dates There is nothing about penalty

Thanks 

Tp

[kapo1997]

Or you can go to view and search for Form 2210, then fill in the information on the Form. Turbo tax will then determine whether you need to pay the penalty based on the information you enter.

[DaveF1006]

Yes. Go to the forms mode in your return:

• Select open form
• Type in Form 2210 and this will open the form directly.
• Fill in the information it requests.

[thomasp5154]

Hi Kapo!

Thank you for your help.  Since I was at the simple TT table and the directive was to finish the return and come back to complete the table, I should be able to get to that table which the program will then create what is necessary in the Form 2210.  I would like to get to that place in the program and go from that point.  I had to file a 2210 once in the past and it's a typical IRS form which is complicated.  Hoping Brittany has a suggestion.

[thomasp5154]

Dave 

Thanks for the suggestion.  It appears that consensus suggests I complete form 2210 and the program will do everything.  Hopefully, the interview questions in the program are built into the directives on the form itself.  Since my program seems to be a little different from what I see being suggested, I just want to be sure I am in the place I need to be to accomplish the task.  From "step by step" select forms in the blue banner at top.  My version opens a menu on the screen and Form 2210 is selectable.  Open it and have at it.  Sounds right ??

Thanks 

Tp

[kapo1997]

Since you are talking about reducing your late payment penalty by annualizing income, you'll have to show most or a large part of your income came at the second half or last quarter of last year. I found it would be easier if you can tabulate your income on a monthly basis (on a spreadsheet), then you have to add: 1) the first 3 months income (Jan-Mar), then the first 5 months (Jan-May), and lastly the first 8 months (Jan-Aug), then you enter these into Form 2210 (make sure you click on the supplement AI to enter these values). Once you do that, then Turbotax will fill in the rest.

[BrittanyS]

The steps provided by DaveF1006 will work as well.  If you prefer the step by step method, you can follow these steps for TurboTax Business Trust entry:

1. Open TurboTax
2. Select Other Under Federal Taxes
3. Click Yes or No for Household Employment Tax depending on your circumstances
4. Click Continue
5. Enter any Tax Payments Made
6. Click Yes for Tax Elections
7. Click Continue past election forms if none apply
8. The next selection will bring you to the underpayment penalty screen, click continue
9. Click No for Possible Penalty Exception 
10. Click Yes for Do you want to annualize your income

See screenshots below:

@thomasp5154 

[thomasp5154]

Dave 

Thanks again for the suggestions.  I was exactly where you outlined with the spreadsheeting and the whole issue developed when I could not find my way back to the step by step interview for the minimization of the penalty.  I know I am getting one.  Thanks again.

[thomasp5154]

Brittany

Good morning! 

Sorry for not answering sooner but, I was called away on a quasi-emergency as back-up BS for my granddaughter.  I can't tell you how much I appreciate all community members for their personal efforts to assist a total stranger in need of assistance.

Your latest answer with the screen shots and detail shows you have gone to some extra effort.  It pains me to tell you that the functionality as you described just does not work on my laptop.  I don't know if it is the OS which is Windows 10 or something inherent in a bad download of the program. 

On my first pass through the Other section last week, I elected NO to anything I knew did not apply which included Household Taxes and the Tax Elections.  When I go back now to the list of sections to review, they all say Update but, I get only an option to update the number entry.  Once I do so with either zero or a positive number the program brings me back to the menu page to select another category.  This particular product from TT is without question the most frustrating experience I have had in my 20+ years of using TT products.  I have generally used only the Deluxe product (cd Rom) and this year changed to the Premier to better enter address some rental property issues.  I used the Premier with no problem for 4 Form 1040 preps. I was very surprised to find the Business product would not allow auto-input from third party financial houses like RBC, etc.  I am mystified as to why a Business, Trust and Estate product would not have this functionality, and yet, it is offered on the simplest product offering to complete a Form 1040.

I want to thank you again for your assistance and continued support.

Tp