Form 2210

[Bookwoman]

I received a notice from the IRS that I have a penalty for failing to pay estimated taxes. I want to submit a form 2210 to remove this penalty but I can’t get TurboTax to produce one as it says we don’t have a penalty to pay this year. How can I get Turbo Tax to produce this form showing that we don’t owe a penalty?

[Critter-3]

Did the IRS issue an UNDERPAYMENT penalty or a FAILURE TO PAY penalty ?   If the program did not calculate a penalty then there was not a reason to have a penalty applied.  Did you owe on the return ?   Was it $1000 or more ?   Did the IRS change anything on your return  like estimated payments made ? 

[fanfare]

all IRS forms are available in fillable PDF at www.irs.gov

That includes Form 2210.

you have two choices:

amend your return such that Form 2210 is attached and shows no penalty or a smaller penalty.

Get Form 2210 and fill it out yourself showing no penalty or a smaller penalty.

This usually involves checking one of the options  A,  C,, or D.

submit via Form 1040-X that you mail in yourself.

You must have a good Explanation to submit the Form such that is shows IRS calculation was wrong and you are right

OR, you can request a waiver by amending to attach the TurboTax Form 2210 with Box A checked.

@Bookwoman 

[Bookwoman]

It is a penalty for failing to pay estimated taxes. We did owe on our return this year and we did file and pay in full on time. My husband has a 1099 job but between us we also have 3 W2 jobs. We have increased withholding on those W2 jobs instead of paying estimated taxes on the 1099 job. Usually that works out fine - one year we had to pay this penalty, but TurboTax correctly identified it that year. This year, Turbo Tax says we don’t have to pay a penalty (I believe because our combined total tax from last year is less than the total tax paid this year, which is one of the reasons given to file a 2210 for reduced/eliminated penalty). 

My issues are 1. Why did Turbo Tax not identify this penalty if we do, in fact, owe it and 2. Why can’t I use Turbo Tax to produce the 2210 I need to submit to see if the penalty can be reduced or waived based on a comparison to last year’s taxes?

[fanfare]

By default, Form 2210 requires evenly spread Estimated tax installments.

What was your 2021 tax ?
If your estimated tax + withholding is each period 25 % of that amount( x 1.10 if your AGI is over 150,000)
you will avoid an underpayment of estimated tax penalty in 2022.

This is the prior year's tax rule for estimated tax.

In your case you had to satisfy this by withholding only.

The other rule is withholding is 90% of current 2022 tax.

The IRS letter says IRS does not think you met either of these conditions.

Form 2210-AI may help you but it is too complicated for me.

@Bookwoman 

[dmertz]

If you entered everything into TurboTax correctly and TurboTax did not produce any Form 2210, it's likely that the IRS letter is incorrect.  Make sure that you entered the correct amount of your previous-year's tax liability.  If you omitted that causing TurboTax to assume incorrectly that your previous-year's tax liability was zero, TurboTax would not have produced the required Form 2210.

[Mike9241]

@Bookwoman the IRS does not require form 2210 unless one or more boxes on part II is checked. try box B and then carefully review the numbers if the IRS provided a calculation check the Turbotax 2210 vs the IRS. 

as noted by others withholding is assumed to be 25% of the annual total for each period and estimates must be paid on or before the due date. if your withholding did not occur evenly throughout the year you can use the actual withholding for each period also check box D on the 2210. 

4/15 withholding 1/1-4/15

6/15 withholding 4/16-6/15

9/15 withholding 6/16-9/15

12/31 withholding 9/16-12/31

if you come out with a lower penalty even zero send the 2210 and IRS notice back disputing the IRS penalty.

if you made estimated tax payments by mail the IRS usually goes by the postmark date and I think then moves it back a few days. for example, if you put it in the mail on 4/15 but the USPS doesn't get it until 4/17. that would be  backdated to 4/15.

[Bookwoman]

If you entered everything into TurboTax correctly and TurboTax did not produce any Form 2210, it's likely that the IRS letter is incorrect.  Make sure that you entered the correct amount of your previous-year's tax liability.  If you omitted that causing TurboTax to assume incorrectly that your previous-year's tax liability was zero, TurboTax would not have produced the required Form 2210.

This is my thought but it leaves me unable to get a 2210 from TurboTax which seems like an oversight - I should be able to produce one to dispute this IRS charge. 

I use TurboTax every year so it already has my previous year tax liability. I did not need to enter that myself. 

[Bookwoman]

I’ve completed form 2210 to the best of my ability. Line 1 is pretty straightforward but the rest is not, which is why I wanted TurboTax to produce it for me. 

The result is that I don’t owe this penalty but according to the form, Box E is to be checked, meaning that I did have to file page 1 of this form. TurboTax should have produced it with my return. 

TurboTax makes a big deal out of providing correct forms and supporting you if they don’t but I’m not seeing that. There isn’t an easy way to even connect with them about issues like this and I had to resolve it myself. 

[Critter-3]

A 2210 is only produced if needed ... if you want to force the form you can but you must use the Downloaded program and do so in the FORMS mode. 

[dmertz]

If you filed jointly in 2021 or 2022 but not both years and you transferred in your 2021 tax return to begin your 2022 tax return, TurboTax will automatically generate Form 2210 to mark Box E if the it's necessary to use the 2021 to liability to determine any penalty you might owe (because the correct amount for line 8 is smaller than line 5).  If you did not transfer in your 2021 tax return, in the underpayment penalty section you must indicate your differing filing status and enter the appropriate amount for your 2021 tax liability so that TurboTax will mark Box E and prepare Form 2210 Part I correctly.

With regard to marking box E, if you filed jointly in 2022 but not in 2021, the amount to be used on line 8 of Form 2210 is the sum of your 2021 tax liability (or possibly 110% of that) plus your spouse's 2021 tax liability  (or possibly 110% of that).  If you transferred in the 2021 tax return to begin your 2022 tax return, TurboTax will transfer only transfer in your own 2021 tax liability.  After you indicate that you are filed separately or single for 2021 you must adjust the tax liability carried in from the 2021 tax return to add your spouse's share.  The Learn More link in the underpayment section provides instructions for doing this.  Of course if you prepared your 2022 tax return without transferring in the 2021 tax return, you simply enter the combined tax liability rather than having to modify the amount TurboTax carried in.