Form 2210

[ronroberts]

Does the online basic version of Turbotax process form 2210?

Related question. Say one receives a large portion of their taxable income in the 4th quarter unexpectedly, perhaps from an emergency IRA withdrawal, and estimated taxes were therefore underpaid. Is there a way to avoid the penalty for underpayment? If so are the what version of TT is needed to handle this?

Thanks,

[tagteam]

Yes, all versions of TurboTax have Form 2210.

Note that if you owe less than $1,000 or you make estimated payments of 90% of your current year tax or 100% of your prior year tax, you will not owe a penalty for underpayment of estimated tax.

[dmertz]

You have until January 15, 2024 to make a Q4 estimated tax payment (or January 31, 2024 if you file your tax return by that date and pay the balance due).  Still, if none of the safe harbors apply, to avoid an underpayment penalty you would need to annualize income on Schedule AI of Form 2210, an onerous task.

It's possible to avoid needing to make an estimated tax payment by manufacturing tax withholding which can apply equally to each of the tax quarters, thus avoiding the need to annualize income.  You could temporarily increase tax withholding from wages through the end of the year or perhaps obtain an IRA distribution before then end of the year, have the bulk of that distribution withheld for taxes and then use other funds, if available, to complete a rollover of that distribution.  The downside of using an IRA distribution and rollover is that the distribution is subject to the one-rollover-per-12-months limitation.

[NCperson]

@ronroberts 

1) pay the estimated taxes by January 15, 2024.

2) if it turns out you have a underpayment tax penalty, complet form 2210 and be sure to check PART II BOX C.  

then you have the arduous take of completing your taxes on the form for each quarter of the year so prove that that you actually did not under estimate the payment for the first three quarters, but rather had this large income lump in the 4th quarter, which you duly paid by January 15, 20024.