Form 2210AI Line 9 Do I annualize?

[John in Boston]

Hi, I am filling out my 2210AI to calculate my penalties.  AGI is annualized in lines 1-3 by putting in the AGI for each period in line 1 ("Enter your adjusted gross income for each period") and multiplying them by the annualization amounts in line 2 to arrive at the annualized amounts in line 3. Similarly, itemized deductions are annualized in lines 4-6 (Line 4: "enter itemized deductions for the period shown in each column"). Line 9, however, has the cryptic instruction, "Deduction for business income," but doesn't have the subsequent lines to annualize it.  Are we supposed to enter already-annualized numbers in Line 9, which would make sense to me, or the values for each period, which doesn't make sense to me at all (the values are added to the annualized itemized deductions before being subtracted from the annualized AGI?

Hope I am submitting this in the right place. Thanks for any help.

[BillM223 · Accepted solution]

You enter the annualized amounts, which means to me that you did not see this screen where you are asked for the annualized QBI amounts:

This results in the following:

So, first, do you have any QBI income? that's what this line is all about.

[John in Boston]

Dear BillM223, thank you for your reply.  I think I am overthinking this. line 1 is my AGI for each period. Line 1(a) is multiplied by four to estimate what the AGI would be for the year (annualized) if the first quarter were representative of the rest of the year (line 3(a)). Similarly, line 4(a) is my itemized deduction for the first quarter and when multiplied by four estimates what my itemized deductions would be for the year (line 6(a)) if the first quarter were representative of the rest of the year. Each column in line 7 is what my standard deduction is for the year. Line 10 appears to be either the annualized itemized (line 6) or standard (line 7) deduction, plus the non-annualized deduction for qualified business income for the quarter (line 9). Why would the standard and itemized deductions be treated one way and the deduction for QBI be treated another?

It turns out that having put this roadblock on the back burner, it made no difference in my case whether I put in the values for the quarter or the annualized values since my deduction for QBI was trivial (snuck in through some mutual funds or something). It was just my obsessive-compulsive nature driving me to pick up the last pennies.  I don't "need" an answer, but I would like to know the correct way to do it since adding a value for the quarter to a value for the year is not intuitive for me. The fact that it doesn't specifically multiply line 9(a) by four makes me think that it was on purpose.  Thank you.

[John in Boston · Accepted solution]

P.S. You are correct. I did not see the screen since I put the values directly in the form. I believe it makes it clear to me that the values to be put in are, in my parlance, the non-annualized values (e.g. in column a, those for the first quarter, not those estimated for the year). Thank you for answering my question.

[T2T2T2]

I have the same question (I think) for the 2022 tax year -- the screens all appear to be identical, and I do have QBI income. My question is how is the QBI calculated for these 3 periods? I can't seem to find this info anywhere. Is there a specific percentage of the AGI (less 1/2 of the Self-Employment Tax for the period) that should be used here? I looked at the forms, but my preference would be to simply input into the TurboTax environment, and have it place it within the appropriate buckets. And if it is a formula or percentage, why can't TurboTax handle that? Thanks in advance for any help.