How do NOT annualize my income?

[TDAY]

I received a large payment from the sale of ESOPP stock back to the company.

Since this was received 1/2 way through the year, I don't want the payment to be annualized.

How would I enter the date of the payment?

[dmertz]

If you choose not to use the Annualized Income Installment Method, the income is treated as received evenly throughout the year.  The tax code does not permit you to treat one particular item of income as received in a particular tax quarter without doing so for all of your income, deductions and tax credits.

If you do use the Annualized Income Installment Method, income is treated as received in the tax quarter when actually received instead of treating it as having been received evenly throughout the year.  This prevents income received later in the year from causing underpayment penalties for the earlier tax quarters of the year.  As I mentioned, the Annualized Income Installment Method requires allocating all of your income, deductions and credits to the particular tax quarters in which they were received by preparing Schedule AI of Form 2210.  The particular date within the quarter doesn't matter.  TurboTax will offer the opportunity to do this if you would otherwise be subject to a tax underpayment penalty.

[VolvoGirl]

What payment did you make?  Was it an Estimated payment? 

To enter Federal or State Estimated Taxes Paid, including a state estimated payment made in January for the prior year, go to

Federal on left or at top (Personal for Home & Business)

Deductions and Credits

Then scroll way down to Estimates and Other Taxes Paid

Estimates - click the Start or Update button

If you made more than 4 payments - at the bottom is + Add another payment

[TDAY]

I made estimated payments for 2nd and 3rd quarters.  The question is on how to not annualize my income.  I got a very large payout on 6/15/25 for ESOPP stock sold back to the company.  I did not make any estimates in 1st quarter. If income is annualized, I will probably be penalized for not making an estimate for 1st quarter. Is this a problem for not making a 1st quarter estimate?

Thanks!

[VolvoGirl]

No I think you would WANT to annualize in that case to show you got the income on 6/15 and made a payment in the  2 or 3 qtr to cover it.  

Just fill out your tax return.   If you get a penalty on 1040 line 38, you might be able to eliminate it or at least reduce it. You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you. It's form 2210.

How to add form 2210 for Underpayment Penalty
https://ttlc.intuit.com/community/tax-payments/help/how-do-i-add-form-2210/00/25703

It's under

Federal tab or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button