Form 2210 Part II

[domerdoc]

I take regular IRA distributions with tax withheld throughout the year.  My tax liability is skewed towards the end of the year due to taxable portion of Social Security increasing during the year.  For each quarter I figure tax due on Turbotax What If and have chosen not to pay estimated tax if I"m due a refund based on quarterly calculations.  As income increases along with Social Security each quarter, by the 3rd quarter I have a tax due so pay guestimated tax to keep tax due in april <$1000.  I've tried annualizing as well as actual tax paid for a number of years and most of the time there's no penalty or minimal.  This year I learned there is Worksheet 2-2 in IRS instructions for estimated tax to take the Social Security dilemma into account but the worksheet is nearly impossible to figure out.  This flows into Workseet 2-7 (which Turbotax does in Step-by-Step). Despite IRS rules, I don't think I should pay extra tax on SS income during the year if I were to die during the year with no tax liability and refund due.  My "turbotax method" seems to accomplish the same thing as the Worksheet if you include only the taxable SS each quarter for annualizing.  It appears that if I check the "Explain" box to give an explanation so that I may be able to request the waiver for Box A or B.  Has anyone else tried to complete Worksheet 2-2?

[DianeW777]

Definitely use only the taxable portion of your social security in your calculations for estimated tax payments when using Worksheet 2-2. You can attempt the waiver by selecting Box A and If the IRS disagrees they will let you know. 

Your statement should use some of the wording from the IRS instructions here and could be understood and possibly waived with the bold print:

• If you have an underpayment, all or part of the penalty for that underpayment will be waived if the IRS determines that: 
  • In 2024 or 2025, you retired after reaching age 62 or became disabled, and your underpayment was due to reasonable cause (and not willful neglect); 

Your taxable social security can be hard to determine based on income, unless you know in advance your will be tax on the maximum of 85%.

Please update if you have more questions.

@domerdoc