How does Turbotax calculate self employment income to annualize? Turtotax autofilled income for 1/1-12/31 that is different from my wages & income without explanation.

[sej1694]

I have the appropriate records to annualize (and my self employment net income is correctly shown in my Wages & income section), but when I get to the screen to annualize Turtotax fills my total year self employment income with a value that is different, not editable, and not explained.

[RobertB4444 · Accepted solution]

The form takes your income and divides it by 12 in order to get your average monthly income.  Then it puts 3 months in the first column, 5 months in the second column, 8 months in the 3rd column and the whole year in the final column.  That's how the IRS wants it presented.  That only helps you if you had a large payment in any one quarter and you can adjust the income to reflect that.

Review all of the questions under your underpayment penalty section in the 'Other Tax Situations' section in TurboTax and you will be able to adjust the annualized totals from there.

@sej1694 

[sej1694]

Hello, thanks for your reply. I did have uneven income that would benefit from annualizing. I double checked and have answered all of the questions in the section, but my total year self-employment income that Turbotax auto-fills is still quite different from what I reported in the Wages & Income section. Do you have any other recommendations for troubleshooting?

[AmyC]

Yes, let go through the Form 2210 AI together.

• Look at line 1, this shows your entries for your total income. Column a multiplies by 4 since there are 4 quarters in the year and comes up with what your annual income would be if it was just that quarter.
• Line 3 then shows your annual income based on the amounts entered.
• Itemized deductions or standard deductions and QBI are also entered
• Line 13 shows your adjusted income for each column.

Take a look at your form and see which numbers are coming from to determine your income for the year.

To view  your forms and worksheets in their entirety:

• In desktop, switch to Forms Mode.
• For online:
  1. On the left side, select  Tax Tools
  2. Select Print center
  3. Select Print, save or preview this year's return
  4. If you have not paid, select pay now.

I did a very basic example of $1,000 turns into  $4,000 when annualized, I have no deductions the first 3 quarters.  See the screenshot line 13 is the same as line 3 for the first 3 quarters.

The federal and state governments expect  payments when you earn the money. You can make a payment anytime.

Reference: Form 1040-ES, Estimated Tax for Individuals

[sjtigr]

For 2025, at least, look at the information for "Line 28" on this page: 

https://www.irs.gov/instructions/i2210#en_US_2024_publink1000305566

Turbotax is pre-filling the entry with the annual amount x 0.9235

So, likely, the first three periods need to be entered multiplied by 0.9235 as well.