How do I reduce or eliminate my underpayment penalty by annualizing my payments? I do not know how to calculate the quarterly income/expense amounts.

If your one-time payment occurred in the fourth quarter of the year, you may be able to reduce the underpayment penalty.

In TurboTax for desktop, you can use Forms Mode to view Form 1040. Take the amount on Line 37 and subtract the one-time income. Divide the remainder by four and enter that amount in each quarter. Then add the one-time payment in the fourth quarter. This process annualizes your taxable income and may or may not affect the underpayment penalty.