Estimated Taxes

Forum|Forum|5 years ago
February 27, 2021
1 reply
2 views

Has something changed this year? In over 20 years I never had to complete Form 2210 manually. I use the topic method each year and this year I got 14 errors and I'm asked to input quarterly dates and amounts for capital gains distributions, in lines 7, 15 and form 1040 line 3a, each by quarter in form 2210 AI "annualized income". I never had to input before. What is going on??

I've always had dividends and capital gains and losses in the past, and had to pay a penalty for underpayment of taxes before. But I NEVER had to complete form 2210 manually before. Underpayment penalty was done automatically by TT, but not this year.

I put in all the required information for each 1099-D I received and 1099-B just as before. This year I even downloaded my 1099's from my financial institution to see if that would clear it up but it has not.

I'm lost!

gloriah5200

Level 10

You have probably used the short method in years past instead of the annualized installment method you are using this year.

If all the income and withholding and estimated taxes paid were earned and paid evenly throughout the year, you should be able to use the short method instead of having to complete the annualized method.

For additional information, please refer to the following link:

IRS Instructions for Form 2210

The line-by-line instructions are very helpful for how to complete the annualized installment method of Form 2210.

[Edited 03/01/2021|6:45 pm pst]

kayakAuthor

Level 3

Thanks Gloria,
You are the only one that has given me a definitive answer!
Check the records, I've called many times and never got help; several gave up because they could not complete the instructions for 2210 "and promised call backs from experts that never came ". I even had a CPA tell me to "wing it" or "guesstimate the answers"!
It is so aggravating and not what I've come to expect from Turbo Tax.
The 11 to 14 errors in 2210 require information that Turbo Tax already has in my return, I don't understand why I'm asked to copy numbers from schedule D, or put in trade dates that TT already has. I have a very simple return with one small investment in a automated fund that automatically trades in other funds. All those trades have been put in my return. Is Turbo Tax unable to support those funds? If so, they should tell us up front, and not state the Turbo Tax supports 2210 when it doesn't fully. Aren't these calculations the sweet spot for companies like Turbo Tax?

If Turbo Tax unable or unwilling to complete the calculations for 2210 for trade activity (when they have all the required data) please tell us up front.

This question requires an answer from Turbo Tax. To whom should I direct this question? Or, is this more suitable for public forum discussion on other platforms?

And, please tell me how to use the short method to complete 2210. No one else even mentioned that to me as an option in my10 days of calls for help.
Thanks much for your response.

DianeW777

Level 15

The Short Method is described in the Form 2210 Instructions and is printed here for your convenience. As you can see it is used in specific circumstances.

Part III—Short Method -

You can use the short method only if you meet one of the following requirements.
- • You made no estimated tax payments for 2020 (it does not matter whether you had income tax withholding).
- • You paid the same amount of estimated tax on each of the four payment due dates.

If you don’t meet either requirement, figure your penalty using the regular method in Part IV of Form 2210 and the penalty worksheet in the instructions.

TurboTax wants to be certain that the income is entered when you actually received it during the annualized method. For example, they don't know by the W-2 entry when the wages were earned, or many other income documents. For these reasons it's important that you answer the questions about when the taxable income was actually received .

It can be difficult and I understand your experience. The key to the annualized method and when it may be beneficial is when you have a large amount of income in a period that is much later rather than earlier in the year.

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